Corn Commentary
May Corn closes 4 cents lower ($3.63 ½), July 3 ¾ cents lower ($3.71 ¼) and Dec 3 ½ cents lower ($3.86 ¼)
April Chgo Ethanol closes 1.2 cents a gallon lower ($1.529), May 1.1 cents lower ($1.545)
Weekly Corn Export Inspections – 1.333 M T. vs. 1.100-1.500 M T. expected
USDA announces 132 K T. old crop corn sold to S. Korea
The rally we saw in the latter part of last week is advertising failure after the action we saw Sunday night, Monday. The Sunday night trade gapped higher only to fail to follow through during Monday’s day session. Weekly corn export inspections were deemed solid but that data barely got a glimpse. I did not see one single news item to prompt the sell-off. The Rumored Chinese business from early last week has yet to receive any confirmation. The trade is beginning to talk about how big the Quarterly Stocks data could be. No one is really yet comfortable saying planted acres will be as low 90.0 million. Weakness in the wheat market probably had just as much to do with the break today as anything else out there.
Interior cash corn basis sees little change on Monday but the trend still shows a firmer bias. Cash corn movement is minimal at best. The Gulf basis, despite what we think is a pretty decent export program, is showing easier values vs. late last week. Corn spreads ran fractionally lower on the day. Overall the price structure (amounts of carry) continues to suggest we have an imbalance of too much supply and not enough demand.
Last Tuesday the flat price of corn gave us an interim buy signal suggesting the break that started on March 6th had gone low enough and we rallied for three days. Today’s action suggests that the attempt to correct back higher is now over. For the next two weeks corn traders will go back and forth discussing the possible ramifications of large old crop stocks vs. low planted acres. We know SA has penciled in a rather large corn crop – this one item will make the US old crop look that much larger and tend to mute the potential of lower acres. As of this writing I’m thinking July corn will spend the next two weeks trading between $3.65 and $3.80.
Daily Support & Resistance for 03/21
July Corn: $3.68 – $3.75
Dec Corn: $3.83 – $3.89
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