March Corn closed 2 cents lower ($3.78 ½), July 2 ¾ cents lower ($3.85 ½) & Dec 2 ¼ cents lower ($3.88 ½)
March Chgo Ethanol closed $0.024 cents per gallon lower ($1.334), April $0.024 cents lower ($1.350)
USDA suggests planted corn acres in the US for 2020-21 at 94.0 million
Weekly Ethanol Grind – 1.040 million bpd vs. 1.033 million week ago – Stocks – 24.8 Million bbls vs. 24.4 million week ago
Weekly Corn Export Sales – old crop expected at 700 K – 1.100 M T. – new crop expected at 0-100 K T.
The range bound trade in old crop corn continues. Dating back to January 30th the lowest close for March corn has been $3.77 ¾ and the highest close has been $3.83 ½; the average being $3.806. No wonder volatility here stinks. The acreage guesstimate from the USDA this AM has new crop corn matching its contract low ($3.87 ¾). Tomorrow the USDA should be releasing its “demand” for the coming season. Given the idea of a big second season corn crop from Brazil and what looks like successfully developing corn crop from Argentina I don’t think I should be holding my breath for anything market making that involves the upside. Its my opinion that we can’t count on China buying any substantial amounts of corn but what about ethanol? After today’s weekly grind report ethanol stocks in the US are at record high levels.
Not many changes being seen with the interior corn basis; Toledo off 5 cents and Seneca. IL up 1 cent. The overall underlying trend is still firm. The Gulf basis is fully steady with postings over the past two weeks. Corn spreads within the current crop year are still showing a firm bias. I have to think option expiration tomorrow and 1st notice day coming at the end of next week is all part of the spread motion; it is called short covering.
The price action gives me nothing to hang my hat on and the fundamental demand outlook is not much better. What’s out there that will provide incentive for the US producer to go out and plant 94.0 million acres to corn? I’m open to suggestions.
Daily Support & Resistance – 2/21
March Corn – $3.75 – $3.83
July Corn – $3.82 – $3.90
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