May Corn closed 1 ¼ cents higher ($3.53 ¼), July ¾ cent higher ($3.62 ½) & Dec ¼ cent lower ($3.81)
May Chgo Ethanol closed $0.016 cents a gallon lower ($1.320) & June $0.016 cents lower ($1.324)
1st Notice Day Corn Deliveries – 856
It was a two-sided trade for the corn market on Tuesday; finishing higher up front, mixed as one went forward. 1st notice day corn deliveries were 856 stopped by no one in particular. I thought it was interesting that the nearby corn spread firmed on this news. It would suggest that as the delivery period goes on there will be interest in these deliveries. The weakness that was seen during the session was brought on by the continued swoon in wheat and soy prices. What strength that was seen came from the idea that planting conditions in a good portion of the Corn Belt will be constrained by the ongoing soggy conditions. Forecasts for the near term appear to be staying wet. The spec trade continues to be a sizable short (record short) which continues to be surprising since as the price structure is showing barely any risk premium for the questionable start to the planting/growing season.
Interior cash corn prices continue to be firm with one exception, Cedar Rapids. Last Friday they were advertised at 13 cents over, today option price. I’m not sure what caused to spike higher late last week or the swoon since then. All other locations continue to report no new selling. The Gulf basis is grinding higher as the recent rainfall continues to create logistical problems. The July forward spreads showed fractional improvement.
If you believe the ongoing planting problems will be cause for the spec shorts to cover we need to see closes above the Sunday night, Monday highs. As long as planting progress stays impeded the worst case scenario is consolidation at current levels. If it starts to look like planting progress will stay stuck beyond mid-May I have to think shorts will begin to get a bit more aggressive with their short covering. Slow planting beyond mid-May will lead to thoughts of lower acres as well as lower yield. How good are your forecasting capabilities?
Daily Support & Resistance for 05/01
July Corn: $3.58 – $3.66 ($3.70)
Dec Corn: $3.77- $3.85 ($3.88)
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.