Corn Commentary
May Corn closes 5 ¾ cents higher ($3.65), July 6 ¼ cents higher ($3.71 ¾) and Dec 5 ½ cents higher ($3.89)
May Chgo Ethanol closes 0.5 cents a gallon lower ($1.614), June 0.2 cents higher ($1.607)
It was a reversal of fortune for the big spec short position in the corn market. Massive short covering started within 30 minutes after the re-opening for the day session. It seems the spec short is finally paying heed to forecasts for above normal rains in the Corn Belt over the next number of days. Today’s rally erased most of the last 5 days of weakness. Most forecasters are suggesting 2-4 inches of rain between tomorrow and the weekend. I saw one forecaster suggest that over the next two weeks the Corn Belt could be the wettest we have seen going back 26 years. Headlines like this are definitely attention grabbers. Now whether or not this comes to fruition it does suggest the spec was probably a bit too short given the growing season is barely getting underway.
Most interior corn basis locations ran steady on the day while maintaining a firm undertone. The Gulf market ran steady on the day; unchanged vs. one week ago. Spreads within the old crop were easier reflecting 1st notice day (Friday, April 28th) liquidation. Old crop, however, rebounds from recent weakness vs. the new crop.
The broad months’ old trading range lives on. Closes above $3.80 in July corn may prompt additional short covering but that is contingent on how the near term weather plays out. A similar level in Dec corn is $3.95-$3.96. The aforementioned levels represent interim resistance that has held previous attempts to rally.
Daily Support & Resistance for 04/26
July Corn: $3.67 – $3.77
Dec Corn: $3.85 – $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.