Corn Commentary
July Corn closes ¼ cent higher ($3.73), Sept ½ cent higher ($3.81 ¼) and Dec 1 cent higher ($3.92)
June Chgo Ethanol expires unchanged ($1.554), July closes 0.7 cents a gallon lower ($1.558)
Weekly Corn Export Inspections – 1.177 M T. vs. 900 K – 1.200 M T. expected
Corn Crop Progress/Conditions – 96% planted vs. 96% expected vs. 97% 5-year average – 86% emerged vs. 87% 5-year average – 68% GE (+3%) vs. 67% expected vs. 75% one year ago
The Sunday night/Monday trade was rather quiet; just a 3 ½ cent range. The majority of the session was spent at slightly higher levels. The latest COT report from the CFTC continues to illustrate a near massive amount of spec shorts in the corn market. Weather continues to be a major concern – we just went from cool and wet in the eastern Corn Belt to a warmer and drier bias (at least drier as the next few days will feature below normal temps and then begin to warm again by this weekend). Word out of the far western, northwestern Corn Belt is about dryness developing. The latest from the NWS suggests decent growing conditions with the exception Nebraska and S. Dakota (warm & dry). The bottom line – in my opinion the spec trade is too short for the current time frame as we still have the entire growing season ahead of us. Any little blip in the weather towards an extended hot and dry will have these shorts running for cover. For the time being I’m not looking past the months’ old trading range scenario but I have to think if we are going to break out in any direction it will be towards the topside. Bear markets are sustained through liquidation – the only long in the market is the producer. If he has sat this long with his old crop I have to think he is prepared to sit longer; at least through pollination.
10 out of the 11 interior cash markets that I track show a steady to higher trend vs. one week ago. The Gulf, however, is weaker vs. one week ago. Corn spreads continue to stay wide, if not wider, suggesting old crop stocks remain more than ample. For corn spreads to improve I believe the new crop has to be seriously challenged and we have yet to see that.
The technical look suggests the trading range scenario lives on and will live on if tonight’s improved corn ratings have anything to say. As far as NWS forecasts are concerned, if they come to fruition, appear to be pretty conducive to crop development. Trade the range until proven wrong!!!
Daily Support & Resistance for 06/06
July Corn: $3.68 – $3.76
Dec Corn: $3.87 – $3.95
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.