Corn Commentary
Dec Corn closes 1 ¼ cents lower ($3.42 ¼), March 1 ¾ cents lower ($3.55) and July 1 ¾ cents lower ($3.71 ¼)
December Chgo Ethanol closes 0.014 cents a gallon lower ($1.442), Jan 0.015 higher ($1.420)
Weekly Corn Export Inspections – 375.9 K T. vs. 500-700 K T. expected – Cumulative to date – 5.928 M T. vs. 10.862 M T. year ago
Weekly Corn Crop Progress – 83% harvested vs. 83% expected vs. 91% 5-year average
Not much of a trading day for corn; just a 2 ½ – 2 ¼ cent range. Then again with volatility coming down why should there be a bigger range. Given what the USDA gave us last Thursday and the current lack of problems in SA where’s the uncertainty? The trade is already talking about the managed money sector challenging the record short position. My question to you; “Given the current state of the US corn market why shouldn’t the funds be challenging record short positions and/or establish a new record short position?” I have to think that until problems arise in the SA growing season the corn market will be stuck in a grinding type trade with a bias to the downside.
For what it is worth – when the corn market established its record short it was in March of 2016 and March corn did not trade below $3.48. March corn is currently 7 cents away from that level. In March of 2016 the corn carryout was projected at 1.837 billion bu. vs. last Thursday’s figure of 2.487 billion bu. In March of 2016 the S-T-U was at 13.56% vs. last Thursday’s S-T-U of 17.22%.
Most interior cash corn basis quotes read steady to higher. On Monday I saw only one lower posting and that was on the Ohio River. Processors are leading the way with higher basis postings. The Gulf continues to scratch and claw its way higher. Dec corn gains on its forward contracts while March forward sees little change with its respective spreads.
Since last Thursday’s trade took us out of the 10 week old trading range affair to the downside the bias should be for lower prices. Because the volatility is getting so low the day-to-day trade will remain slow but with a grinding type bias to the downside. Rallies back to the low side of the recent trading range should be viewed as selling opportunities.
Daily Support & Resistance for 11/14
Dec Corn:$3.39 – $3.46
March Corn: $3.52 – $3.59
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.