Corn Commentary
Sept Corn closes 4 cents lower ($3.29 ½), Dec 3 ¼ cents lower ($3.45 ½) and March 3 ¼ cents lower ($3.58 ¼)
Sept Chgo Ethanol closes 0.025 cents a gallon lower ($1.489), Oct 0.025 cents lower ($1.426)
The Latest Weekly Ethanol Grind – 1.042 million bpd vs. 1.052 last week – Stocks – 21.3 million bbls vs. 21.5 last week
Weekly Corn Export Sales – old crop vs. 0-200 K T. expected – new crop vs. 400-700 K T. expected
Once again we see another round of new contract lows, new contract low closes. The thought is that old crop is being moved to avoid additional storage charges as well as making room for new crop which is right around the corner. Demand for new crop corn, so far, is no better than routine. As of last week export sales trail last year’s pace by 5.0 M T. Weak ethanol prices (the lack of gasoline refining) were also cited. Additional pressure was seen from 1st notice day fears as it was the Sept contract that led the losses. Coming into the day’s trade 1676 contracts of corn were registered for delivery. Given the problems at the Gulf and the fact that deliverable corn receipts are shipping certificates deliveries could be large.
Interior cash markets have a mixed look. Locations that are aware that farmers will have to move grain in the near term are reluctant to raise bids. Locations that have to have corn to grind are bumping up bids. The Gulf is relatively quiet due to the recent storm. The Sept contract lost ground to all of its deferred contracts while Dec forward ran mostly steady on the day.
The first week of September has a bit of history in regards to interim lows. Will this year follow that lead? Currently a case can be made that the market is indeed oversold if one wants to follow daily momentum indicators. The 14-day RSI sits at 25.7. Textbooks will tell you that figure represents oversold. Recent experience, however, suggests something below 20 will catch some bottom picking. Tomorrow is month end – the spec trade has developed a pretty big short position – some short covering cannot be ruled out.
Daily Support & Resistance for 08/31
Dec Corn: ??? – $3.50
March Corn: ??? – $3.63
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.