March Corn closed 5 ¼ cents higher ($3.87), July 2 ½ cents higher ($3.86 ¼) & Dec 1 cent higher ($3.85 ½)
March Chgo Ethanol expired unchanged ($1.261), April closed $0.007 cents a gallon lower ($1.284)
USDA announces 110.0 K T. of sorghum sold to China
Weekly Ethanol Grind – 1.079 million bpd vs. 1.054 last week – Stocks – 25.0 million bbls vs. 24.7 last week
Weekly Corn Export Sales – old crop vs. 700 K – 1.200 M T. expected – new crop vs. 0-100 K T. expected
Strong old crop cash markets lead to continued bull spreading and in turn keeps the flat price well supported. We have yet to see any deliveries against the March contract. A lack of quality corn coupled with a lack of farmer selling are the primary supporting issues. I don’t think the ongoing demand is all that great but with the lack of movement into the pipeline it makes that existing demand look that much greater. The weekly ethanol grind hit another milestone with its available stocks hitting all time highs. It’s a small wonder these processors keep grinding away as margins in many areas are in the red.
Cash markets continue with the steady to higher bias. This and continued no deliveries against the March contract have the bull spread being the primary feature of the day. The Gulf basis for corn continues to show a strong bias as well. What puts a top into the bull spreading scenario remains to be seen. As I mentioned earlier it’s a small wonder the ethanol processor continues to grind away as the lesser efficient operations have to be operating in the red.
As long as we continue to see a lack of deliveries against the March contract it will be biased to move higher and in turn dragging the rest of the old crop along with it but to a lesser extent. Both May and July corn are grinding their way through recently established technical resistance. I have to think the majority of the recent buying is speculative short covering. New crop corn will dog it in respect to the rally in old crop as the idea of increased planted acres this spring will keep this market under wraps.
Daily Support & Resistance – 3/05
July Corn – $3.82 – $3.91
Dec Corn – $3.82 – $3.90
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