Sept Corn closed 1 ½ cents lower ($4.24), Dec ¾ cent lower ($4.30 ¾) & March ¾ cent lower ($4.39 ¾)
August Chgo Ethanol closed $0.018 cents a gallon lower ($1.482) & Sept $0.013 cents lower ($1.503)
Weekly Ethanol Grind – 1.039 million bpd vs. 1.066 million week ago – Stocks – 23.7 million bbls vs. 23.4 million week ago
Weekly Corn Export Sales – old crop vs. 150-400 K T. expected – new crop vs. 100-300 K T. expected
It was a two-way street in the corn market on Wednesday. Strength was seen early stemming from Tuesday’s positive looking technical performance as well as some forecasters suggesting a warmer and drier bias for the Corn Belt as we finish off the month of July and move into August. The latest from the NWS does not see any extremes for the Midwest; some stress for the central and southern Plains states. Weakness started to develop mid-morning on what looked like some cash selling as well as some second-guessing on the forecasts. Last Monday the USDA reported that 35% of this year’s corn crop had gone through pollination; we may not see the completion of pollination until we get well into the month of August. Adding to the less than stellar performance I think we saw a fair amount of inter-market spreading; long wheat vs. short corn. Something to watch out for – Western Europe grain areas are on the edge of experiencing record heat. This would have a definite impact on their spring grains.
The interior corn basis has taken on a mixed look Wednesday. Recent weakness on the river appears to be stabilizing. Despite the perception that ethanol margins are slipping processors continue to stand in. It is my belief processors will operate with small losses vs. shutting down plants. The Gulf continues to show a firm bias at its midday posting despite being a shade easier vs. Tuesday night. Sept corn continues to lose to Dec suggesting some cash corn is indeed moving. Dec through July spreads ran unchanged on the day.
Today’s inability to follow through from the early rally suggests we are no better than consolidation. Daily momentum indicators still read lower. The mid-low $4.20’s is still believed to be a support area for Dec corn. Failure there, however, would suggest a decline closer to the $4.10-$4.05 level. As I mentioned yesterday closes above $4.40 will call for some re-evaluation.
Daily Support & Resistance for 07/25
Sept Corn: $4.16 – $4.30
Dec Corn: $4.22 – $4.38
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.