Corn Commentary
July Corn closes 3 ¾ cents higher ($3.81 ¾), Sept 3 ½ cents higher ($3.92) and Dec 4 ¾ cents higher ($4.04)
July Chgo Ethanol closes 0.005 cents a gallon lower ($1.511), August 0.012 cents lower ($1.516)
Weekly Corn Conditions – 68% GE vs. 66% expected vs. 75% last year – Silking – 10% vs. 14% last year vs. 13% 5-year average
Volatility with a higher price bias continues on within the corn market. Flat price starts higher, breaks 8-9 cents and then spends the balance of the day retracing the break (the break was wheat influenced). Late in the day new crop prices came within 1 cent or so of the day’s earlier high. As we enter the month of July selected areas of the Corn Belt are seeing their respective corn crop begin pollination. I say “selected” as not all areas of the Corn Belt are seeing this due to the uneven spring planting rates. Certain parts of the Corn Belt appear to be in pretty decent shape other not so. Short term forecasts call for some moisture in the central and eastern parts of the Corn Belt while the western, northwestern reaches of the Corn Belt begin to heat up. Many forecasts suggest that by next week the majority of the Corn Belt will be experiencing hot and dry conditions. With that said recent intra-day attempts to sell off have been very well received from the speculative sector. I have to think this scenario will continue as long as weather forecasts remain less than desirable for many areas of the Corn Belt.
Interior cash corn markets, as well as the Gulf, are under pressure from increased cash movement. This rally is attracting old crop to move. Spreads within the old crop continue to be soft and old crop continues to lose to new crop. Deliveries continue to circulate against the July contract. Spreads within new crop have been firming in response to the speculative weather induced buying.
When it was all said and done Wednesday was an inside day of Monday. Inside days are not known to be trend changes. Dec corn is still looking at challenging the $4.10 level (which is not saying much since we are within 5-6 cents of that level). I’m showing some channel resistance at the $4.14 level. A weekly Dec corn chart is trying to suggest we have the potential to trade to the $4.40 – $4.50 level. As I mentioned earlier any intra-day breaks will probably be well received.
Daily Support & Resistance for 07/06
Sept Corn: $3.84 – $3.99
Dec Corn: $3.96 – $4.10
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.