Corn Commentary
July Corn closes 3 ¼ cents lower ($3.67 ¾), Sept 3 ½ cents lower ($3.75 ½) and Dec 3 ½ cents lower ($3.85 ¼)
June Chgo Ethanol closes 0.1 cents a gallon lower ($1.507), July unchanged ($1.521)
Weekly Corn Export Inspections – 1.395 M T. vs. 800 K – 1.000 M T. expected
Corn Planting Progress – 71% vs. 68% expected vs. 70% 5-year average – Emergence – 31% vs. 5-year average 36%
Recent price action in the corn market suggests it doesn’t know what to do. Does it pay attention to this year’s reduced acres? Does it pay attention to the currently more than ample old crop supply? Does it pay attention to current planting rates? Does it pay attention to longer term weather considerations? Does it pay attention to failing wheat prices? Does it pay attention to a record sized spec short position for the current time frame? I’m told the spec short in the corn market is nearly record size for any time frame. The bottomline to all of this is that the corn market remains mired in a months’ old trading range affair.
Most interior cash corn markets are showing a slightly firmer bias. Cash movement remains slight at best as the American producer is busy with his field work, not on his marketing. The Gulf edges higher from recent weakness. Weekly export inspections were considered strong as they came in 395 K T. higher than trade estimates. Despite what appears to be a better cash market corn spreads saw little change on the day. Overall corn spreads remain wide as they sit at contract lows or hover just above contract lows.
In addition to being a trading range affair the price action in the corn market is also giving us a short term triangulation formation; lower highs along with higher lows. This has been developing since mid-late April. Normally a violation one way or the other will give us a minor move to the overall trading range perimeter. The low side for July corn is $3.60 while the high side is just shy of $3.80. Similar points for Dec corn are $3.78 to $3.96. Trigger points for a move to either of these levels would occur with violations of last week’s respective highs and/or lows.
Daily Support & Resistance for 05/16
July Corn: $3.65 (?) – $3.73
Dec Corn: $3.82 – $3.91
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.