Corn Commentary
July Corn closes 5 ½ cents lower ($3.69 ½), Sept 5 ½ cents lower ($3.77) and Dec 5 cents lower ($3.87 ¾)
June Chgo Ethanol closes 0.6 cents a gallon lower ($1.464), July 0.9 cents lower ($1.490)
It looks like we have a bit of a battleground setting up – good growing corn conditions in the western Corn Belt vs. not so good conditions in the eastern Corn Belt. As we move into the first of the new month there will be a fair amount scrutiny as to how many acres will have to be replanted Missouri, Illinois east. Prevent plant dates range from late May to early June. With this said weather considerations into the first full week of June will be closely monitored. Midday weather updates were showing a drier bias going forward. The latest from the NWS suggests a cool and dry bias in the western Corn Belt followed by cool and wet longer term. The eastern Corn Belt continues to favor a cool and wet bias for both the 6-10 day and the 8-14 day. What dry days we will have feature below normal temps.
Western cash corn markets continue to show the weakest basis. I’m told that Monday’s rally did attract some old crop movement. River basis swings back and forth depending upon which location. The Gulf basis appears easier. Corn spreads ran fractionally easier on the day – the old crop/new crop spreads are challenging recent contract lows.
I know this sounds like a broker record but the months’ old trading range lives on. The spec trade remains leery of covering their shorts when rallies are based on too much water. We are going to have to see better confirmation of lost acres before they are willing to pay up to get out of their shorts. The managed sector’s short positions are large enough to spark a sharp knee-jerk reaction to the upside if and when the amount of lost acres is confirmed.
Daily Support & Resistance for 05/24
July Corn: $3.67 – $3.74
Dec Corn: $3.85 – $3.92
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