Corn Commentary
March closes 3 ¼ cents lower ($3.69 ½), July 2 ¼ cents lower ($3.83 ¼) and Dec 2 cents lower ($3.96)
March Chgo Ethanol closes 1.5 cents a gallon lower ($1.491), April 1.3 cents lower ($1.510)
USDA announces 120 K T. old crop corn sold to unknown
Other than the USDA announced export sale there was not a lot of friendly news around. The bearish news is private analysts hiking the Brazilian corn crop. FC Stone suggests their corn crop is 93.3 M T. (32.02 + 61.28). Last month’s estimate from CONAB was 87.4 M T. (28.8 +58.6). Granted the Brazilian 2nd season corn crop has a long way to go but the suggestion is a big number. CONAB will update production estimates early Thursday morning. Later that day the USDA will update US and World Supply-Demand. Little change is expected for the US data while the World carryout is expected to increase by about 1.0 M T.
Most river locations that are involved for export are showing steady to better basis levels. The corn basis in the western Midwest still leaves a lot to be desired but then again that is where yields were the most awesome. The gulf basis continues to inch higher. The inability of the market to follow through from last week’s rally has diminished cash corn movement. The May forward corn spreads ran fractionally weaker out to the new crop.
Yesterday I talked about how the corn market had gone into a mini consolidation phase as it recent days’ activity trades inside of March 1st’s action which in turn trades inside of Feb 28th’s action. Despite being down 5 plus cents at one time on Tuesday we continue to trade inside the aforementioned dates. To summarize – all we have seen over the past 4 days of trade is some consolidation followed by a test of the topside of the interim support that was established with last week’s rally. As long as July corn can hold the $3.75 level on a closing basis the immediate uptrend holds true.
Daily Support & Resistance for 03/08
July Corn: $3.80 – $3.88
Dec Corn: $3.93 – $4.00
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