Corn Commentary
May Corn closes 5 cents lower ($3.56 ¾), July 4 ¾ cents lower ($3.66) and Dec 4 ¼ cents lower ($3.84 ¼)
June Chgo Ethanol closes 1.9 cents a gallon lower ($1.482), July 1.2 cents lower ($1.488)
Weekly Corn Export Inspections – 720.5 K T. vs. 900 K – 1.200 M T. expected
Corn Planting Progress – 47% vs. 44% expected vs. 52% 5-year average – Emergence – 15% vs. 19% 5-year average
The call for drier weather going forward has the corn market under the gun on Monday. Short weather suggests we can see some light showers this week favoring the southern Midwest but nothing like we saw in the previous 7-10 days. Temps this week will stay on the cool side but then begin to warm next week. With all of this said (and if forecasts come to fruition) the idea is that the corn crop will indeed get planted in a timely manner. On Wednesday the USDA will update old crop supply-demand as well as giving us its first look at the new crop. I’m thinking the USDA will use the March 31st acres and trendline yield (168.0 bpa) for the new crop. I don’t think the demand numbers will change all that much from what they gave at the end of February at their annual Outlook Conference. If we are going to see noticeable bullish data it will be the World data. See the attached estimates’ sheet for what the trade is looking for on Wednesday.
Interior cash corn markets continue to show a steady to higher bias. The Gulf, too, shows a higher bias. Locations that were impacted by flooding last week showed a lower bid structure. Now that flooding has receded bids are coming back. Despite the basis coming back spreads continue to be soft. Most of the softness is due to trading funds reinstating short positions.
The flat price is approaching the lower half of what I believe to be a trading range market. Weather considerations will remain in the forefront of trader chatter. Estimates for US carryouts suggest ample supplies going forward. The World new crop estimate suggests a noticeable drop in carryout. As of this writing my bias is to see the trading range affair live on. I do not want to see July corn trade much below $3.56 and Dec corn below $3.74 otherwise it will rattle my cage as to the trading range ideas.
Daily Support & Resistance for 05/09
July Corn: $3.63 – $3.70
Dec Corn: $3.81 – $3.88
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