Corn Commentary
May Corn closes 8 ¼ cents lower ($3.58), July 8 ¼ cents lower ($3.66 ½) and Dec 7 ¾ cents lower ($3.84 ½)
June Chgo Ethanol closes 5.1 cents a gallon lower ($1.468), July 4.5 cents lower ($1.472)
Weekly Corn Export Sales – 771.6 K T. old crop vs. 700-900 K T. expected – 24.1 K T. new crop vs. 0-200 K T. expected
Thursday brings us continued flooding in central Illinois, Indiana and northwest Ohio. So why was the market down 7-8 cents? One has to remember we are a futures’ market and the trade is not looking at today’s weather but rather the continued forecasts calling for dryer weather beginning this weekend. Drying rates for Illinois east will continue to be rather slow due to the continued call for below normal temps. I’m told that the planters in the western, northwestern Corn Belt will be rolling by this weekend. Wheat prices getting slammed added to the poor price performance in the corn market as did the sharply lower ethanol prices.
The interior corn basis continues to show a mixed look. River locations that are dealing with flooding report lower basis levels as these facilities can’t move the corn. Where flooding is not an issue basis levels stand in. The Gulf inches higher due to the poor movement along the rivers. July corn forward spreads eased lower as the already short funds returned to the market.
The week’s highs were made on Monday due to the weekend weather. Areas that got soaked over the weekend continue to get soaked as the week progressed yet the trade could not register new highs beyond Monday’s high. That’s known as poor price performance vs. what could have been construed as continued bullish news. The inability to move higher attracted more chart based selling. As much as one may say this week’s price action was a failure given the weather scenario for nearly half of the Corn Belt we are still a trading range affair and should be traded accordingly.
Daily Support & Resistance for 05/05
July Corn: $3.64 – $3.71
Dec Corn: $3.82 – $3.89
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.