Corn Commentary
May Corn closes ½ cent lower ($3.66 ½), July¾ cent lower ($3.73 ¾) and Dec ½ cent lower ($3.90 ½)
May Chgo Ethanol closes 0.1 cents a gallon lower ($1.650), June 0.3 cents higher ($1.628)
Highlights of the USDA Supply-Demand report – US – carryout unchanged while increasing ethanol usage by 50 million bu. and lowering the feed & residual by 50 million bu. – World – increased carryout by 2.3 M T.
What the USDA had to say was deemed neutral to friendly for the domestic data as the trade was looking for a higher US carryout. The USDA’s statement as to the world data was deemed a bit negative as the projected carryout came in higher vs. trade expectations. Flat price sold off on this news but did not stay down as the flat price honored recently established interim support on the break and focus is slowly but surely moving to planting conditions. There is just enough “above normal” rainfall in the forecasts to keep the trade on edge as to timely planting of the corn crop. Extended delays in corn planting will result in fewer acres.
Interior cash corn markets if not steady are slightly better as producer sales are few and far between and demand from export and ethanol continue to be pretty decent. Spreads within the old crop ran fractionally better while old crop loses fractionally to the new crop.
Tuesday’s price action had a friendly bias to it as recently established interim support was tested, it held and the market rallied. Overall the corn market remains in a broad trading range affair while the short term slant is for higher prices. Granted we have plentiful old crop stocks in both the US and in the World but acres for new crop are low enough and weather patterns this past year have been erratic enough that a call for some weather premium in the price structure is not unreasonable. In other words get ready to play the weather game for the next few weeks.
Daily Support & Resistance for 04/12
July Corn: $3.70 – $3.78
Dec Corn: $3.87 – $3.94
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.