May Corn closed ½ cent lower ($3.40 ¾), July 1 ½ cents lower ($3.46) & Dec cents 2 ¼ cents lower ($3.57 ½)
April Chgo Ethanol closed $0.029 cents a gallon lower ($0.911), May $0.043 lower ($0.921)
USDA announces 113.0 K T. old crop corn sold to Japan
USDA Corn Quarterly Stocks – 7.953 billion bu. vs. 8.125 expected vs. 8.613 year ago
USDA Prospective Corn Plantings – 96.990 million acres vs. 94.328 expected vs. 89.700 year ago
Old crop corn – the quarterly stocks figure was deemed friendly based on expectations. A strong rate of feeding and a strong 2nd quarter for ethanol grinding is my surmise. Going forward feeding should continue strong while grinding for ethanol should fall out of bed. I’m not sure exports can increase enough to offset the loss of disappearance from the ethanol sector. For exports to improve Brazil will have to have a poor 2nd season corn crop. So far its off to a slightly dry start.
New crop corn – the acreage intention number was nothing but downright bearish. Its relatively early to say this acreage projection will hold true going forward given what has happened with the ethanol sector. A good portion of this acreage projection/survey was compiled prior to the ethanol sector going kablooey.
Interior cash corn markets continue to be on the defensive. The Gulf market firms from slow movement and a developing export pipeline. Bull spreads work out to Dec 2020. New crop corn appears to be in the process of developing additional amounts of carry within the price structure.
After the USDA numbers were released old crop corn prices challenged contract lows. Once it became evident they were holding short covering ensued. Going into this report the spec sector was a sizable net short. Month end and quarter end added to the short covering. After today’s activity the July corn chart is suggesting a double bottom against the high $3.30’s. For this formation to attract further short covering we’ll need to see closes minimally above $3.57 if not above $3.61. If old crop corn can develop some short covering it will work to offer some stabilization to the new crop. Without that short covering I doubt Dec corn can do any better than just stabilize.
Daily Support & Resistance – 4/01
July Corn – $3.42 – $3.51
Dec Corn – $3.55 – $3.61
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.