Corn Commentary
Sept Corn closes unchanged ($3.42), Dec ½ cent higher ($3.56 ¼) and March½ cent higher ($3.68 ¾)
Sept Chgo Ethanol closes 0.010 cents a gallon lower ($1.510), Oct 0.019 cents lower ($1.456)
Weekly Corn Export Sales – 102.4 K T. vs. 50-250 K T. expected – 423.3 K T. new crop vs. 400-700 K T. expected
Is the corn market running out of sellers? The flat price registered new contract lows on Thursday but only had a 2 ¼ – 2 ½ cent range. Later tonight, tomorrow the Farm Journal Midwest Crop Tour will finalize their findings. To date the trade has rationalized the tour’s daily assessments as being not too far off from what the USDA alluded to August 10th. Weekly export sales were nothing special vs. expectations. For what it is worth new crop corn export sales are lagging last year’s pace for the current time frame by 5.01 M T. Tomorrow is Sept corn option expiration day – given where the flat price is I don’t think we have to worry about calls being exercised. The big feature will be how many puts that are in the money get exercised in turn creating additional futures’ shorts in the market.
It was a mixed showing for the interior corn basis on Thursday. Processors continue to bid for corn while river locations appear to backing off of recent strength. The Gulf appears to be easing as well. I’m not sure if the River/Gulf easing is in response to the big weather that is supposed to hit the Gulf this weekend, early next week. Corn spreads ran fractionally easier on the day.
Quiet at the bottom? It always spooks me when a market goes quiet when it is on an extreme. Despite the narrow trading range on Thursday the flat price did register a minor reversal; new contract lows up front (Dec, March & May), just new lows in the rear and all featuring higher closes. All of this suggests to me the trade is just too short for the time being.
Daily Support & Resistance for 08/25
Dec Corn: $3.53 – $3.61
March Corn: $3.65½ – $3.73 ½
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.