Corn Commentary
Dec Corn closes 2 cents higher ($3.45), March 1 ½ cents higher ($3.56 ½) and July 1 ¼ cents higher ($3.72 ½)
December Chgo CBOT Ethanol closes 0.017 cents a gallon lower ($1.398), Jan 0.008 lower ($1.395)
Weekly Corn Export Inspections – 632.7 K T. vs. 500-700 K T. expected
Weekly Corn Crop Progress – 90% harvested vs. 91% expected vs. 95% 5-year average
Follow through speculative short covering from Friday supports the corn market on Monday. It remains my thought that prompting of the rally is mostly technical in nature as fundamental rationale appears slight. There is some talk that China may have bought some corn cargoes off of the PNW in recent days but confirmation remains lacking. There is also some concern about dryness in selected areas of Argentina. As far as I’m concerned as to the dryness in Argentina it is spotty, there are scattered showers in the short term forecast and longer term forecasts (11-15 day) call for better moisture. Brazil remains in good shape. Near record, if not record speculative shorts (depending on which trader category one is watching) continues to be the best support this market has going for itself.
Most interior cash corn markets continue to show a steady to higher bias. I say most as Illinois River locations tend to flip-flop back and forth depending on which location needs corn the most. The Gulf is holding onto recent gains. Corn spreads continue to show a tightening bias led by the Dec contract. Some of this spread strength can be tied to the Dec options expiration at the end of the week (the 24th). The 340 puts and the 345 to 360 calls show the largest open interest levels.
How far can the current run of short covering take us? From last Thursday’s low to today’s high Dec corn has rallied 9 cents, March 8 ¼ cents and July 8 cents. Good looking congestive type resistance comes into focus about another 3-5 cents higher. I have to think that if we can see these levels within Tuesday’s trade they would represent selling opportunities.
Daily Support & Resistance for 11/21
Dec Corn: $3.40 – $3.48
March Corn: $3.52 – $3.60
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