Corn Commentary
July Corn closes ½ cent higher ($3.92 ¼), Sept ¼ cent lower ($4.02) and Dec ½ cent lower ($4.14 ¾)
August Chgo Ethanol closes 0.008 cents a gallon higher ($1.561), Sept 0.010 cents higher ($1.562)
Brazilian Corn Production (CONAB) – 96.0 M T. vs. 93.8 last month vs. 97.0 (USDA)
Lots of volatility in the corn market ranging from Monday night through Tuesday’s day session. The flat price started out higher due to the lower than expected condition ratings, sold off from unexpected scattered rainfall from eastern Nebraska thru parts of Iowa and into central Illinois. Once it became apparent that whatever profit taking we were going to see had been seen the trade reverted back to touting the longer term forecasts. The end result was fractionally mixed closes.
Most cash corn locations that I follow show basis levels on the defensive as cash corn has been moving on the rally. In recent days spreads within the crop year have been trying to inch in but one has to look close to see the improvement. The 2017/18 crop year has been gaining on the 2018/19 year – that I think is in response to the fund buying up front. The Gulf remains slack looking in response to the increased cash corn improvement as well as a slowing in the export market as Brazil has been ramping up their corn exports.
Tomorrow the USDA will update supply-demand using the June 30th acres. If they fool with the yield changes are expected to be minimal. Trade expectations are calling for higher carryout numbers for both old crop and new crop. For as shaky as the price action looked on the early morning break recently established minor support was barely challenged. The ability of the market to reject the break suggests the funds are not yet done buying this market. It’s July and we are going to have corn pollinating all month – some areas look great; others not so much. Once we get the USDA numbers out of the way the trade will once again ask “what’s the forecast?”
Daily Support & Resistance for 07/12
Sept Corn: $3.94 ($3.89) – $4.12 ½
Dec Corn: $4.06 ($4.01) – $4.23 (?)
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.