Corn Commentary
July Corn closes 1 ½ cents lower ($3.80 ¼), Sept 1 ½ cents lower ($3.90 ½) and Dec 1 ¼ cents lower ($4.02 ¾)
July Chgo Ethanol closes 0.005 cents a gallon lower ($1.511), August 0.012 cents lower ($1.516)
Informa suggests the US corn crop is 14.166 billion bu. w/ a yield of 169.7 bpa
Weekly Corn Export Sales – old crop vs. 350-550 K T. expected – new crop vs. 0-200 K T. expected
Flat price corn goes into a minor corrective/consolidation phase on Thursday. The trade is torn between the better than expected crop condition last night as well as the short term forecasts (calling for scattered moisture) vs. the longer term forecasts that are trying to hint at hot & dry developing next week and beyond. Most are in agreement that a ridge will set up over the Northern Plains but what remains to be seen is whether or not storms will roll over the top and down into the central and eastern areas of the Corn Belt. The day’s low was established during the Wednesday night session when the wheat market had its initial crash and burn. The majority of the day session was spent trading between $4.00 and $4.03 (Dec).
With the exception of Burns Harbor (+5 cents) most interior cash corn locations sat at steady with Wednesday or moved lower. Spreads ran mostly steady on the day. The spread markets continue to remind us that the recent rally is weather fear based and has nothing to do with better demand.
Granted we are in a weather market and forecasts can change overnight but the price action still suggests the potential for higher prices in the near term. I thought the corn market put is a relatively constructive performance on Thursday despite being lower all day. The trade had plenty of opportunities to break the market especially when Informa released its latest ideas on crop size. The break that followed that news did not last very long. It is my thought that as long we have potential weather issues hanging over the market’s head the spec trade will continue to move out of their net shorts and develop net long positions. I find it interestingly bullish that last night’s break could not fill the Friday to Monday gap at $3.93 ¾.
Daily Support & Resistance for 07/07
Sept Corn: $3.82 – $3.99
Dec Corn: $3.94 – $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.