March Corn closed 1 ¾ cents higher ($5.34), July ½ cent higher ($5.28) & Dec 2 cents lower ($4.42 ½)
February Chgo Ethanol closed unchanged ($1.530), March unchanged ($1.600)
USDA announces Corn Export Sales – 680.0 K T. to China
Weekly Ethanol Grind – 933 K bpd vs. 945 K week ago – Stocks – 23.6 M bbls vs. 23.6 M week ago
Weekly Corn Export Sales – old crop vs. 900 K – 1.600 M T. expected – new crop vs. 0-100 K T. expected
Another solid corn sale to China has March corn registering a new contract high by 2 cents but unfortunately does not register a new high close. Profit taking set in shortly after the highs were set prompting a 14 cent sell-off. The majority of the session after that break was spent in a relatively tight range from 1 cent lower to 3 cents higher. As far as I’m concerned the market was due for some profit taking after rallying 51 cents from Monday’s low. The recent corn sales to China has prompted many to suggest the USDA is grossly understating Chinese demand. The USDA attaché to China has already suggested China will import 22.0 M T. of corn vs. the most recent USDA estimate of 17.5 M T. Some privates are now saying Chinese corn imports could be as high as 26.0-27.0 M T. for the marketing year.
The interior Midwestern corn basis runs mixed on the day. The Ohio River reports a 4 cents improvement, Seneca, IL a 2 cent improvement while Davenport, IA declines by 2 cents. The midday gulf posting runs unchanged as it sustains recent easing. Corn spreads continue to show a bullish bias whether its within the current marketing year or old crop vs. the new crop.
Today’s price action suggests the worst case scenario going forward is some consolidation that may feature some backing and filling of the recent 51 cent rally. We have to remember as the price goes higher volatility increases and that means some wicked intra-day price action. Tomorrow is weekly export sales day and we’ll probably take our intra-day cue from however they turn out. If we do see another sharp sell-off similar to what we saw today I have to think it will be well received.
Daily & Resistance – 01/28
March Corn : $5.23 – $5.42
July Corn: $5.17 – $5.36
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