Corn Commentary
March closes 1 cent higher ($3.75 ½), July½ cent lower ($3.89 ¼) and Dec ¼ cent higher ($3.99 ½)
March Chgo Ethanol closes 3.2 cents a gallon higher ($1.604), April 2.6 cents higher ($1.615)
USDA announces 101.6 K T. old crop corn sold to unknown
Weekly Corn Export Inspections – 1.255 M T. vs. 900 K – 1.100 M T. expected
After spending Sunday night, early Monday morning at slightly easier levels the flat price resumed its grind higher for the majority of the day session with emphasis on the word grind. The daily fund spec continues to work on developing a net long position while cash selling provides the resistance – this is a classic example of the adage “market going to the orders”. Weekly export inspections were deemed excellent and this pace of inspections is expected to continue until SA new crop corn comes on line and that is still months away.
Going back to the first of the month most interior corn basis locations are reporting easier levels. This is reflective of the recent rally triggering new cash corn sales. The trend at the Gulf dating back to the first of the month is easier as well. Corn spreads are not reflecting the trend in the basis as they are firming in response to the spec fund buying. Any type of “fund” buying usually concentrates in the upfront contracts as that is usually where the best day-to-day volume is. They need to go where the volume is as that is where the best liquidity is.
Late last week flat price old crop corn registered an interim buy signal when the nearby contract closed above the $3.70 level. My first target is $3.77 and we came within ¼ cent of achieving that today. The next target is up towards the $3.86 level. These targets are based on recent corrections. Volume over the last 3 days has been noticeably larger vs. previous days’ volume and open interest has been rising suggesting new short hedges from the cash sales as well as the new longs from the spec sector. It should be noted that both short term (inter-day) and daily momentum indicators are starting to get a bit high. That advises against chasing the rally at this time.
Daily Support & Resistance for 02/14
March Corn: $3.71 – $3.78 ½
July Corn: $3.85 – $3.92 ½
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