Corn Commentary
Dec Corn closes ¾ cent lower ($3.35 ¾), March 1 ¼ cents lower ($3.47 ¾) and July 1 ¼ cents lower ($3.64 ½)
January Chgo CBOT Ethanol closes 0.021 cents a gallon lower ($1.295), Feb 0.020 cents lower ($1.320)
USDA announces 152 K T. of corn sold to Mexico
CONAB suggests the Brazilian corn crop is 92.2 M T. – 25.0 M T. first season, 67.2 M T. second season vs. 92.37 last month
USDA US Corn Projected Carryout 2.437 billion bu. vs. 2.478 expected vs. 2.487 last month
USDA World Corn Projected Carryout 204.08 M T. vs. 202.72 expected vs. 203.86 last month
On the surface the US corn projected carryout was deemed mildly constructive (ethanol usage increased by 50 million bu.) while the World projected corn carryout was considered mildly bearish (higher than expected, higher vs. the previous month). The initial reaction prompted some short covering; March corn briefly traded 4 cents higher on the day. This short covering attempt faded miserably as by the close new contract lows were seen along with new contract low closes. It doesn’t get much more bearish than this type of price action.
Interior cash corn runs mostly steady, a couple of locations a bit softer. The Gulf remains nothing to write home about as far as market making demand is concerned. Corn spreads ran unchanged to fractionally softer vs. the new crop.
Flat price corn, basis the nearby, continues to suggest a challenge of the interim weekly low of $3.28 ½ made back on August 31st. With Brazilian weather looking good for crop development and Argentina being forecasted for timely rain it will be tough to sustain a rally over the near term. As of this writing I’m developing the idea that we won’t see a rally of consequence until we get closer to the “year-end churn”.
Daily Support & Resistance for 12/13
March Corn: ??? – $3.53
July Corn: ??? – $3.69
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