Corn Commentary
March closes 5 ½ cents lower ($3.56 ½), July 4 ¾ cents lower ($3.70 ¾) and Dec 4 cents lower ($3.86)
Jan Chgo Ethanol closes 6.1 cents a gallon lower (1.619), Feb 5.7 cents higher ($1.561)
Weekly Export Sales – 1.516 M T. old crop vs. 800 K – 1.100 M T. expected – 24.1 K T. new crop vs. none expected
Informa suggests this past season’s corn yield is 176.1 bpa vs. the USDA at 175.3
Informa suggests next season’s planted corn acres will be 90.151 million vs. last season’s 94.5
Flat price corn tries to trade higher in the early going on Thursday taking its cue from solid looking weekly export sales (cumulative sales are the best in the last 5 years; currently running 14.4 M T. better vs. one year ago – also the best in the past 5 years) as well as stronger soybean and soybean meal market. The rally did not last long as prices rolled over in response to sharply lower wheat prices (extreme strength in the US Dollar). Some will say the strength in the US Dollar was mostly responsible but for the time being the US is the corn market to world at least until SA new crop comes on line. Adding to the day’s bearish move was ethanol prices taking another hit; down almost 15 cents a gallon in the last three days. It did not help when Informa came out and suggested last year’s US corn crop could be another 59 million bu. higher vs. what the USDA has been posting. I would think that in the USDA January update any increase in production would be offset by an increase in exports. Brazilian growing conditions for the 1st season corn crop continue to be very good. Argentina continues to have a forecast for beneficial moisture beginning this Sunday into next week. Right now the Argentine growing season is equivalent to out late May, early June.
Interior cash corn markets (basis) continue to show a steady to higher trend with processors and river locations showing the best bids. The Gulf continues to firm from the season’s lows seen last Tuesday. Despite decent looking cash market spreads eased all the way out to the new crop.
The mid-$3.60’s continue to act as formidable resistance for March corn. As we begin the holiday time frame I suspect the trade will get slower but continue to be range bound. It will be interesting to see how the trade handles suspected index fund rebalancing in early January vs. the idea of increased cash movement. For the time being keep your trading shoes on fading 2-4 day extremes in either direction.
Daily Support & Resistance for 12/16
March Corn: $3.53 ($3.50) – $3.62
July Corn: $3.67 ($3.64) – $3.76
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