Corn Commentary
March closes 1 ½ cents higher ($3.61 ¼), July 2 cents higher ($3.74 ¼) and Dec 1 ¾ cents higher ($3.88 ½)
Jan Chgo Ethanol expires unchanged (1.507), Feb closes 4.3 cents higher ($1.550)
Weekly Ethanol Grind – 1.043 million bpd vs. 1.028 last week – Stocks – 18.7 million bbls vs. 18.7 last week
Weekly Corn Export Sales – old crop vs. 650-950 K T. expected – new crop vs. 0-50 K T. expected
Bloomberg Survey suggests the US corn crop is 15.200 billion bu. (-26 million bu.) with a yield of 175.2 bpa (-0.1 bpa) – Carryout is suggested at 2.378 billion bu. (-25 million bu.)
The grind higher continues with emphasis on the word grind. Spurring the market on continues to be short covering from the spec sector. They are taking their cue from the anticipation of index fund rebalancing (buying) beginning next Monday. Other items lending support – iffy weather in Argentina (some areas too dry, other areas too wet), weakness in the US dollar, strength in the US wheat markets, the unknown around what the USDA may say on the 12th with its updates on Supply-Demand, Quarterly Stocks and last but not least the idea that US corn export shipments will begin to expand as move into the New Year.
Interior cash corn markets are giving a mixed look on Thursday. River locations continue to be firm as is the Gulf. Some processing locations (not all) are backing off due to the recent decline in ethanol margins. Cash corn movement has been “okay” with the recent rally but it seems as if we will need to see new highs in the futures’ market to spur significant movement. Corn spreads saw minimal changes for the day.
Daily charts read higher; in line to test the fall highs against the $3.69 level (March). It is my thought that if we surpass that level it will take some bullish data from the USDA on the 12th. The index fund rebalancing, for the most part, is already in the market and the participants in the daily trade will be ready and waiting for it.
Daily Support & Resistance for 01/06
March Corn: $3.56 – $3.65
July Corn: $3.68 1/2 – $3.77½
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