Corn Commentary
March Corn expired 2 cents lower ($3.83 ½), July closes 3 cents lower ($3.96 ¾) and Dec 2 cents lower ($4.07 ¾)
April Chgo Ethanol closes 0.005 cents a gallon higher (1.527), May 0.003 cents lower ($1.540)
Weekly Corn Export Sales – old crop vs. 1.300-1.700 M T. expected – new crop vs. 0-100 K T. expected
Old crop corn stumbles with Wednesday’s efforts to challenge Tuesday’s highs. New crop corn registers a new high by a ½ cent but this market too stumbles. Thoughts of a short term overbought coupled with the extreme weakness in the soybean complex added to the selloff. I also noticed some inter-market spread pressure (vs. wheat) as that spread had broken down into suspected support after a break of 30 cents in the past two weeks.
Interior cash corn markets remain on the defensive – this holds true for the Gulf as well. In recent days we have seen another wave of cash corn selling and with freight rates coming down (river problems have eased noticeably vs. wheat we saw 1 ½ weeks ago) it justifies the break in the basis. Corn spreads were on the defensive reflecting the cash movement as well as the break in the basis.
Yesterday I mentioned a reluctance to chase the bulge in flat price corn. At the same time I did not want to say the market was topping out. After Wednesday’s performance I get the idea the corn market is in line for a “breather”. The spec trade has amassed a rather large long position in a relatively short period of time. In just two months the spec went from a net short of 258 K contracts to a net long of 231 K contracts (my estimate using CFTC data from March 6th and applying the daily fund activity). As of this writing a break of 10-15 cents cannot be ruled out.
Daily Support & Resistance for 03/15
May Corn: $3.85 – $3.92
July Corn: $3.93 – $4.00
Dec Corn: $4.04 – $4.11
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.