Corn Commentary
March closes 6 ½ cents higher ($3.66 ¾), July 5 ¼ cents higher ($3.81) and Dec 5 cents higher ($3.93 ¾)
March Chgo Ethanol closes 0.1 cents a gallon higher ($1.505), April 0.5 cents higher ($1.528)
March Corn deliveries – no tenders yet (expected)
It has been awhile since the rumor mill was pushing our markets around but it happened today. Rumor – It looks like we may be seeing changes to the renewable fuels program. Until now the onus for mandated ethanol blending has been on the refiners – now it is being said that onus will be put on the position holders at the ethanol terminals. Rumor – To offset some of that onus it is now being thought that waivers will be put in place for increased ethanol blending opening the door for E15 later this season. This prompted a rush of buying in the corn futures market. Later in the day a White House spokesperson said there is no bio-fuels executive order in the works. Prior to recent days spec funds had been trying to build a net long position in anticipation of possible problems with the growing season – today’s news/rumors brought those spec funds back into the market. March 1st usually begins the conversation around planting conditions and such. Needless to say March 1st is tomorrow.
Most interior cash corn markets were quiet today. Basis pushes were seen along the Ohio River and from a prominent Illinois processor. The Gulf basis ran steady on the day holding on to its recent gains. It will be interesting to see if any new producer sales were made with today’s midday spike high. Corn spreads basically got back what they lost on Monday. Given the ongoing export program I doubt we’ll see weakness in the spreads beyond what we saw on Monday.
Charts don’t know news!! All they know is price action. Given the highs of the day we saw vs. where we closed I have to think the sideways to lower grind we have been experiencing since mid-month will continue. I’m not sure we are going to see that much more on the downside; maybe 5-10 cents additional from Monday’s lows – that would suggest July corn trading down to $3.70-$3.65 and Dec corn down to $3.85-$3.80.
Daily Support & Resistance for 03/01
July Corn: $3.75 – $3.85
Dec Corn: $3.88 – $3.98
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.