Sept Corn closed 4 ½ cents higher ($3.46 ¼), Dec 4 ½ cents higher ($3.59 ¾) & March 4 ½ cents higher ($3.71 ¾)
August Chgo Ethanol closed 0.008 cents a gallon higher ($1.413), Sept 0.007 cents higher ($1.411)
Short covering/bottom picking was the name of the game on Tuesday. Buyers took their cue from the lower than expected weekly corn crop ratings released Monday afternoon. In my opinion the lower than expected crop ratings has prompted some of the recent sellers to rethink their ideas on a 180+ national yield. Weather forecasts going forward continue to suggest nothing threatening to the development of the crop.
Interior corn bids at river locations that feed to the export market continue to show a defensive look. Corn bids from ethanol processors show a steady to better tone. Export bids suggest no real need for corn right now. I think most in the trade are well aware there is a fair amount of old crop corn that will have to move in the next couple of months. The rapid development of the corn crop suggests we will have “early” corn this year. The Sept/Dec spread continues to languish at contract lows. Dec forward spreads did show a minor spark mostly due to the flat price short covering. Overall, however, corn spreads remain wide.
Charts show consolidation against recent lows. It’s my opinion that if we can get prices to close above last Thursday’s highs it will prompt additional short covering. I don’t think we will see any sort of a runaway as there is a ton of old crop sitting above the market that is anxiously waiting to move. Until we have a better handle on how pollination went the best that can be hoped for is further consolidation. So far what I have heard is limited and it has gone both ways.
Daily Support & Resistance for 07/18
Sept Corn: $3.41 – $3.50
Dec Corn: $3.55 – $3.65
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