Corn Commentary
March expires ¾ cent lower ($3.53 ¾), July closes 1 ¼ cents higher ($3.69 ¾) and Dec ¾ cent higher ($3.84 ¼)
April Chgo Ethanol closes 1.4 cents a gallon lower ($1.519), May 1.5 cents lower ($1.535)
USDA announces 120 K T. new crop corn sold to Mexico
We finally are hearing about some demand stories involving US corn. S. Korea (3 different entities) buys about 325 K T. of corn. Bloomberg runs a story via JCI suggesting China has bought 500-600 K T. of US corn. Reuters says China has bought at least 3 cargoes of US corn off of the PNW. So far none of the Chinese buying has been confirmed by the USDA.
The aforementioned news worked to stabilize the recent break in the flat price. When the news started to circulate flat price corn traded as much as 3 ½ cents higher but then settled in to trade unchanged to 2 cents higher for the balance of the day. If we are to see and further short covering from this news, I’m thinking, we’ll need to see some sort of confirmation from the USDA. Without confirmation the best the corn market will do is stabilize at current levels.
Most interior cash corn locations are showing unchanged basis levels. There a couple of river locations and one eastern Midwest processor that is showing a steady to higher bias. Fresh cash corn movement is non-existent due to the recent break. The Gul appears to be edging higher from last week’s easing. Bull spreads improved fractionally within the current crop year while gaining a little bit more vs. the new crop. Overall corn spreads remain depressed looking but are showing some minor signs of flirting with oversold.
Flat price corn registers a very minor looking interim reversal for the recent 6-day decline. Without confirmation from the USDA on the aforementioned business I’m not sure we have enough to get a sustainable rally going. My bias the near term is stabilization.
Daily Support & Resistance for 03/15
July Corn: $3.65 – $3.75
Dec Corn: $3.80 – $3.88
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