Corn Commentary
Sept Corn closes 15 cents lower ($3.57 ¼), Dec 15 ¼ cents lower ($3.71) and March 15 cents lower ($3.83)
Sept Chgo Ethanol closes 0.003 cents a gallon lower ($1.591), Oct 0.003 cents lower ($1.571)
Weekly Corn Export Sales – 52.0 K T. old crop vs. 100-300 K T. expected – 628.4 K T. new crop vs. 400-600 K T. expected
After the close the USDA reports that US farmers reported prevented plantings of 950 K corn acres
Major league curve balls from the USDA were thrown at the corn market today. The trade was looking for 4.5 bpa yield reduction; the USDA says only a 1.2 bpa yield reduction. Adding insult to injury the USDA cut demand by 50 million bu. The end result was a carryout reduction of 52 million bu. when the trade was looking for 322 million bu. reduction. Needless to say the reaction was rather ugly. The only bright spot (if it can be called a bright spot) was the USDA leaving the projected World carryout unchanged.
In recent days the interior cash corn basis has had a firm tone due to slow movement. After today I would have to think basis will continue to improve. If the producer was an unwilling seller prior to today’s trade I can’t imagine his tune has changed unless he’s throwing the towel. I doubt that is happening as no one (that I’ve talked to so far) really believes the national corn yield will be that high when all is said and done. Corn spreads in the nearby ran mostly unchanged while losing to the May forward.
Given the recent attempt to correct higher followed by today’s failure Dec corn is now targeting the $3.61 level. Yes, few people believe the USDA yield but that is in part to all hears about are the bad areas. Are you willing to sell this market in the hole?
Daily Support & Resistance for 08/11
Sept Corn: $3.49 – $3.64
Dec Corn: $3.64 – $3.77
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.