Corn Commentary
March closes 9 cents higher ($3.75 ¾), July 8¼ cents higher ($3.89 ¼) and Dec 7 ½ cents higher ($4.01 ¼)
March Chgo Ethanol closes 0.4 cents a gallon lower ($1.521), April 0.5 cents lower ($1.543)
Weekly Ethanol Grind for Week Ending Feb 24th – 1.034 million bpd vs. 1.034 previous week – Stocks – 23.1 million bbls vs. 22.7 previous week
Weekly Corn Export Sales – old crop vs. 700-900 K T. expected – new crop vs. 150-350 K T. expected
On Wednesday it seemed as if the trade was playing the “what if” game around yesterday’s rumors as to changes in the renewable fuels program. If the rumored plan did come to fruition it would be bullish; increased corn usage for ethanol. Adding to this idea the spec trade is indeed adding to their recently established net long positions. The idea with the new spec longs is all about the possibility of adverse growing conditions once the growing season starts which in some southern areas will be later this month. Adding further support to this idea is the recent data from the USDA suggesting planted corn acres will be 4 million for the coming season.
Interior cash corn markets are steady to better. Some, not all, locations when rolling from March to May did it at better levels vs. what the March/May spread was posting. The Gulf market, however, appears to be a bit easier as we move into the month of March. Corn spreads firmed on Wednesday with the March contract leading the way. We have yet to see any deliveries posted to the March contract. It seems no one wants to lose their “river” ownership given the ongoing export program. May forward spreads were also firm especially against the new crop. Some are wondering if the recent probing of the $4.00 level in December could get us some additional corn acres.
For as strong as the price action was on Wednesday it was still an inside day of Tuesday. This suggests the interim buy signal that was registered on Tuesday remains intact. With the funds continuing to add to their net long positions it is very difficult to stand in front of them. Daily momentum indicators had been moving south prior to Tuesday – it now appears these indicators have reversed course back to the upside.
Daily Support & Resistance for 03/02
July Corn: $3.83 – $3.94 (?)
Dec Corn: $3.95 – $4.06 (?)
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.