July Corn closed 2 ¼ cents lower ($3.53 ¾), Sept 2 ¼ cents lower ($3.63 ¼) & Dec 1 ¾ cents lower ($3.75 ½)
July Chgo Ethanol closed 0.006 cents a gallon lower ($1.393), August 0.006 cents lower ($1.410)
Despite finishing a couple of cents lower the price action is trying to say the corn market has gone low enough for now. At one point relatively early in the day session corn prices were down 17 cents. Short covering ensued and prices were able to recover to slightly higher on the day. Prices were unable to sustain the short covering rally but the early extreme losses were not seen again for the balance of the day. The rhetoric behind the trade action has not changed from wheat we have been trading in recent days; fears of trade wars, great crop conditions and non-threatening forecasts. One week from now some may say selected areas of the Corn Belt may have received too much rain but for now rain will make grain. Talk of “hot & dry” developing in July is slowly being put on the back burner.
Cash corn movement continues to be almost non-existent. If there is any corn moving it was previously contracted. Despite the break most interior basis locations are running unchanged. I do show a couple of processor locations with slightly better bids. Corn spreads within the 2018-19 marketing year ran mixed on the day while 2018-19 loses to the 2019-20 marketing year. The Gulf market shows not much happening as it hovers just above last week’s interim lows.
As I mentioned earlier Tuesday’s price action is trying to suggest it has gone low enough for now. Unfortunately this does not make the market bullish. We will still have to contend with trade war fears, good growing conditions and non-threatening forecasts. Tuesday’s daily price range was 19 cents wide; don’t be surprised to see the next number of trading sessions trade inside this range.
Daily Support & Resistance for 06/20
July Corn: $3.46 – $3.60
Dec Corn: $3.68 – $3.81
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.