Corn Commentary
May Corn closes 6 cents lower ($3.59), July 5 cents lower ($3.66 ¾) and Dec 4 ¾ cents lower ($3.84 ¼)
Not updated – May Chgo Ethanol closes 0.5 cents a gallon lower ($1.614), June 0.2 cents higher ($1.607)
Weekly Ethanol Production – 987 K bpd vs. 993 K bpd last week – Stocks – 23.2 million bbls vs. 23.0 million bbls last week – lower production yet larger stocks
Weekly Corn Export Sales – old crop vs. 700-900 K T. expected – new crop vs. 50-250 K T. expected
Welcome to the wonderful world of weather forecasting. Tuesday’s rally was all about the possibility of big time moisture over the next 10 days or so. Wednesday’s sell-off was all about a light at the end of the tunnel meaning by May 10th or so a drier bias is expected to develop – this is according to midday updates. Other news of note was not really there. It should be noted, however, it appears the 2nd season corn crop in Brazil is developing in fine form.
The interior corn basis continues to show a steady to higher bias. The Gulf, too, inches higher. Most of the higher basis is all about near non-existent new farmer selling. Despite the higher bias in basis spreads within old crop corn were softer. I have to think the soft looking nearby spreads are all about the potential for deliveries on Friday as it is 1st notice day against the May contract.
The day-to-day flip-flop in prices has the corn market continuing to advertise it is a broad trading range affair. We are currently experiencing our first bout of weather related trading. The season is barely getting under way so get used to this type of activity at least until forecasters get a better handle on long term weather considerations. The next step for the near term is to assess just how much moisture occurs over the number of days and how long it will take to dry out. The longer it takes to dry out the chatter will turn to replanting and that in turn will lead to further chatter about the possibility of reduced yields due to late planting. Just remember that chatter induced trading is usually short term.
Daily Support & Resistance for 04/27
July Corn: $3.61 – $3.71
Dec Corn: $3.79 – $3.89
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.