Corn Weekly Comments

Corn Weekly Comments

To start the week corn opened the overnight session higher but slipped to trade lower and extended session losses throughout the day. Early support came from technical buying as corn is oversold and in need of a correction. Adverse weather conditions in both Brazil (late planting) and Argentina (drought) have run their course in the short term and are mostly worked into the market. Losses were trimmed slightly due to last week’s export inspections estimate which came in at a marketing year high (but still below the pace needed to make USDA projections). Economic concerns and trade issues with Mexico added to the selling pressure.

On Tuesday corn was steady early in the overnight session, turned lower late in the overnight session but climbed higher throughout the day session to close with decent gains. Support came from USDA’s announcement of a sale of 612,000 MT of corn to China. Marketing year to date China has bought 4.5 MMT of US corn vs. 12.1 MMT at the same week last year. Spillover support came from the strong gains in the wheat markets. A wire service poll in Brazil estimates corn production at 126.6 MMT vs. USDA’s 125.0 MMT. Dr Cordonnier lowered his estimate of Argentina’s crop by 3 MMT to 37.0 MMT vs. USDA’s 40.0 MMT but left Brazil unchanged at 121.0 MMT vs. USDA’s 125.0 MMT. Texas’s corn planting is 30% complete vs. 24% average while Louisiana is at 78% planted vs. 5% average.

Corn ended Wednesday’s session mixed with small gains in the front months and small losses in the new crop contracts. The front months were supported by USDA’s report of another sale to China, this time 667,000 MT, bringing the two-day total to 1.28 MMT. As of last week’s report, marketing year to date sales to China were at 4.5 MMT vs. 12.1 MMT at the same time last year. But gains were limited by a disappointing ethanol report as production was up just 4,000 barrels per day to 1.014 million barrels per day and stocks increased by 1.074 million barrels.

In Thursday’s session corn opened the overnight session lower but managed to brush off the early selling pressure to post gains and end higher. Early selling spilled over from the lower wheat complex. Support came from another export sale as China was in once again and bought 641 TMT of US corn, bringing the three day total to 1.9 MMT (over 75 MB). Last week’s corn export sales pace was within expectations. Allendale’s acreage survey puts US corn acreage at 90.4 million vs 91.0 million from the Ag Outlook Forum and vs 87.8 million last year. Weather concerns added support late in the session as forecasts are calling for below average temps for the Northern Plains through the first half of April.

May corn support is at $6.35 while resistance is at $6.85. Dec corn support is at $5.45 while resistance is at $5.95.

For the week, May corn was at $6.3425 up 17.0 cents. Dec corn was at $5.6125 up 2.0 cents.