Corn Commentary
March closes 2 cents higher ($3.60), July 2 ½ cents higher ($3.74) and Dec 2 cents higher ($3.87 ½)
Feb Chgo Ethanol closes 2.7 cents a gallon lower ($1.524), March 2.3 cents lower ($1.540)
USDA announces 112.5 K T. corn sold to unknown
Weekly Corn Export Inspections – 876.5 K T. vs. 600-800 K T. expected
After a quiet Sunday night session flat price eased into the day session. By mid-session prices began to firm in anticipation of buying from the index fund rebalancing (today, Monday, is the first day and will last thru the week). This rally did not go anywhere of consequence as the fund buying has been anticipated for some time now and the daily trade was waiting for it. Weekly corn export inspections were deemed solid as they came in above trade expectations. Export inspections should continue to improve as we move into the first quarter of the New Year.
As we move forward into the week the trade will continue to focus on index fund rebalancing (buying) but more importantly what the USDA may have to say on Thursday, the 12th. According to the Reuters news wire poll of traders here are the guesstimates for those reports (vs. previous month’s data) – production – 15.196 billion bu. (15.226), yield – 175.1 bpa (175.3), harvested acres – 86.747 million (86.836), US carryout 2.385 billion bu. (2.403), World carryout – 221.94 M T. (222.25), Argentine corn production – 36.3 M T. (36.5), Brazilian corn – 87.24 M T. (86.50) and Quarterly Stocks – 12.300 billion bu. (year ago 11.238).
The interior cash corn markets took on a mixed look on Monday as most stayed steady with recent postings while river locations posted some a bit easier, some a bit better. Processors still show the best bids but are showing signs of slipping due to the recent erosion of ethanol margins. The gulf appears to be fractionally easier but maintaining an overall firm trend. Corn spreads were fractionally softer within the current crop year but maintained a firm bias over the new crop.
The technical look still suggests we’re a trading range affair with a bias to challenge the upper end of the range. $3.65 remains the initial topside target followed by something closer to $3.69. A move above the latter, I think, will have to have help from the USDA on Thursday.
Daily Support & Resistance for 01/10
March Corn: $3.56 – $3.65
July Corn: $3.70 – $3.79
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