July Corn closed 2 ¾ cents lower ($4.24 ¼), Sept 2 ¼ cents lower ($4.33 ¾) & Dec 2 cents lower ($4.41 ¾)
June Chgo Ethanol closed $0.004 cents a gallon lower ($1.513) & July $0.006 cents higher ($1.507)
Weekly Corn Export Inspections – 743.0 K T. vs. 700 K – 1.100 M T. expected
Weekly Corn Crop Progress – Planted – 67% vs. 71% expected vs. 96% 5-year average – Emerged – 46% vs. 84% 5-year average
There was a great amount of indecision being reflected in the corn market’s price action on Monday as prices ranged from near 4 cents higher to near 9 cents lower. Early ideas had planting rates a bit further along vs. what was talked about late last week. Surging wheat prices lent support to corn when it was rallying to its day’s highs. When wheat saw its midday selloff corn prices dove to new lows for the day. The threat of Mexico retaliating with its own tariffs on US corn weighed on the market as it did last Friday. The US cannot afford to lose Mexico buying US corn as they are the US’s best corn buyer. It should be noted that for the next number of days forecasters are calling for a fair amount of moisture south of I-80 stretching from Ohio west to Nebraska. North of that line it is not expected to see that much moisture.
The interior corn basis is all about location. Where high water levels are impacting loading/shipping those locations are running steady to easier if not totally out of the market. Interior processors continue to stand in with their basis. The Gulf over the weekend rolled to the month of June which featured lower basis levels vs. what was seen in May but these new basis levels do have a firm tone. Given forecasts for the near term the logistical problems of late are not going to go away anytime soon. Corn spreads were under the gun reflecting the flat price selling as well as the idea the current planting problems/yield drag will impact the new crop much more than the old crop as we have sufficient supplies for old crop. Additionally; the funds are now focusing on the new crop as starting this Friday the “big boy” index funds will start rolling out of their July positions. The smaller funds appear to have started their rolling today.
As I mentioned earlier today’s price action is reflecting indecision. The recent flip-flop motion is occurring against levels that have contained the corn market dating back to July 2014 (last week’s highs). If we take those highs out you can be darn sure we will be going a lot higher as it will signify the crop has a major league problem. As of this writing it’s more of an “unknown”. If one looks at a daily price chart and not know it’s a corn chart a technical case can be made that the market is making a top. So – is it a top or just the pause that refreshes?
Daily Support & Resistance for 06/04
July Corn: $4.10 – $4.40 (?)
Dec Corn: $4.25 – $4.55 (?)
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