Corn Commentary
Dec expires 4 ½ cents lower ($3.51 ¾), March closes 1 cent higher ($3.62) and July¾ cent higher ($3.75 ½)
Jan Chgo Ethanol closes 6.3 cents a gallon lower (1.680), Feb 5.3 cents higher ($1.618)
Weekly Ethanol Grind – 1.040 M bpd vs. 1.023 last week – Stocks – 19.1 M bbls vs. 18.5 last week
Weekly Export Sales – old crop vs. 800 K – 1.100 M T. expected – new crop vs. none expected
Flat price corn started the day where it left on Tuesday; in a downside corrective mode. A sharp break in the ethanol market (building stocks) lent pressure as did a weak soybean and soybean meal market (forecasts for beneficial moisture in the dry areas of Argentina). Later in the day the corn market started to divorce itself from these outside influences and began to grind higher (emphasis on the grind). It appeared we had some inter-market spreading, long corn/short soybeans, lending some support. The high of the day came on the close; day trade short covering is being cited.
The interior corn basis ran unchanged across the Midwest on Wednesday. The Gulf, too, held fully steady. Corn spreads finished fractionally firmer on the day with the March leading. The Dec contract expired below the day’s trading range as the spread collapsed late. I have the impression that we saw some fairly decent movement yesterday – further challenges of the mid $3.60’s should probably get us additional movement.
Despite knocking at the door of some decent looking resistance flat price corn does not want to stay down. Is the trade already looking ahead into early January when index fund rebalancing is thought to bring some extensive buying into the flat price corn? The daily price charts continue to read higher. So far the inter-day price action continues to support the idea of higher prices as well.
Daily Support & Resistance
March Corn: $3.58 – $3.65 ($3.67)
July Corn: $3.72 – $3.79 ($3.81)
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