July Corn closed ¾ cent higher ($4.47 ½), Sept 1 ¼ cents higher ($4.53) & Dec ¼ cent higher ($4.57 ½)
July Chgo Ethanol closed $.005 cents a gallon higher ($1.580) & August $0.012 cents higher ($1.602)
Hmmm – crop conditions come in lower than expected and the market fails to sustain the ensuing rally. This suggests to me that the spec is long enough for now without new bullish information. I have to think that if we are to start a new leg higher it will have to come from the USDA on Friday. Acreage trade estimates have been in the market since last night so this is nothing new. Quarterly Stocks (old crop) estimates are close to record large if not record large. Weather forecasts for the near term appear to be conducive for better plant growth.
St Louis closes down once again due to the high water that was created with this past weekend rains. This prompts the Gulf to be sharply higher. Any location that can bypass St. Louis is advertising a higher basis. Basis elsewhere continues to be firm on a lack of producer selling. The producer sits on his old crop until he has a better realization of his new crop or a better understanding of the Market Facilitation Program. Bull spreading was the only redeeming factor in today’s trade.
The price action is suggesting we have gone high enough for what we know right now. The question now becomes will the USDA give us incentive for yet higher prices. Price charts are in a minor consolidation phase following the highs we saw early last week. With a little bit of imagination the last few days of activity resembles an upflag with the succession of higher lows as the market tries to retrace last week’s late break. If we take out last week’s lows the chance of sell stops from recent buyers could easily be elected.
Daily Support & Resistance for 06/26
Sept Corn: $4.45 – $4.59
Dec Corn: $4.50 – $4.64
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