March Corn closed 7 cents higher ($3.81 ¾), July 5 ¾ cents higher ($3.81 ¼) & Dec 3 ¾ cents higher ($3.84 ½)
March Chgo Ethanol closed $0.007 cents per gallon higher ($1.261), April $0.007 cents higher ($1.291)
Today’s flat price corn trade brings us follow through short covering that started on Monday. I have to think a good portion of the short covering was prompted by the rebound in equities. Unfortunately the equity bounce failed to follow through and that in turn saw corn prices easing from their morning highs. It is my opinion that the trade just got too short and those spec shorts got very emotional after Monday’s equity rally. Other news of note – the USDA Ag Secretary is mulling over whether or not he may be able to alter new crop corn’s insurance price as this year’s price is the lowest since 2016 – the pace of the Brazilian 2nd season corn planting is moving along in the state Mato Grosso as it is considered 93% done – the country of Peru has changed its import duties of US corn down to zero; this could mean potential new export business of 3.0-4.0 M T. for the US.
Most interior corn basis locations read steady to higher. The Gulf stays firm as well. I’m told the recent 2-day rally has prompted some producer movement but not enough to impact the spreads. Corn spreads within the old crop continue to firm and old crop gains on new crop. We’ve yet to see any deliveries against the March contract. This is the result of a shortage of quality corn that is needed elsewhere.
Since last week’s low to today’s high May & July corn have rallied 18 ¾ and 16 ¼ respectively. New crop corn has rallied 11 ¾. The lack of deliveries against the March contract has rallied it 22 cents from low to high. With the exception of the March contract these rallies have put prices right into the thick of resistance that was created when prices started breaking down on Friday, February 21st. Without new export business for corn and/or ethanol I have to question how much higher corn can rally.
Daily Support & Resistance – 3/04
July Corn – $3.77 – $3.86
Dec Corn – $3.78 – $3.87
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.