Sept Corn closed 1 ¼ cents lower ($3.62 ½), Dec ½ cent higher ($3.68 ¼) & March ½ cent higher ($3.80 ½)
Sept Chgo Ethanol closed $0.022 cents a gallon lower ($1.295) & Oct $0.006 cents lower ($1.314)
Weekly Corn Export Inspections – 639.1 K T. vs. 500-800 K T. expected
Weekly Corn Crop Condition & Progress – 57% GE (+1%) vs. 57% expected vs. 68% year ago – Dough Stage – 71% vs. 87% 5-year average – Dented – 27% vs. 46% 5-year average
Flat price corn gives us a half-hearted effort at consolidation as it registers an inside day of Friday. The Sunday night strength can be attributed to the low ProFarmer yield as well as the slow maturity of the crop. The announcement that China and the US will resume trade talks was only psychologically supportive as China is not buying any corn due to the decimation of its hog herd. Current weather is a two-edged sword. Recent rains aid kernel filling but the cooler than normal temps keep maturity rates slow. As of this writing no one is putting out any “frost talk”. Yes, temps are cooler than normal and maybe the “rock belt” will flirt with some high 30’s temps but the longer term weather talk suggests a resumption of more normal temps if not moving back to above normal temps. Weekly corn export inspections were deemed no big deal.
The interior corn basis has taken on a mixed look for today. River locations are showing a steady to better basis while processors appear to be easing. The Gulf basis is better vs. what we saw one week ago but as far as I’m concerned it is still nothing to write home about. Sept corn loses big time to the Dec as Sept 1st starts a new marketing year and pricing of the old crop is mandated in many areas unless the producer wants to incur a new round of storage charges. Adding to the spread action is this Friday is 1st notice day against the Sept contract. Dec forward spreads ran steady out to July 2020.
From a momentum point of view one would think the corn market has run out of sellers. Last week’s CFTC COT report showed speculators swinging 87 K contracts to being net short 70 K contracts. The managed money sector swung 100 K to being net short 56 K contracts. One would think that would be enough for the time being. Unfortunately what’s out there to say they are wrong? Unless we get an immediate accord with China or frost talk appears overnight I’m thinking corn prices will settle into a consolidation mode with the contract low ($3.63 ¾) being support and the $3.80 level being resistance.
Daily Support & Resistance for 08/27
Dec Corn: $3.65 – $3.71 ½
March Corn: $3.77 ½ – $3.84
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