Corn Weekly Comments Feb. 23

Corn Weekly Comments Feb. 23

On Monday evening, corn opened the overnight session lower but recovered to trade with gains by the end of the night session. Early selling was tied to pressure from last week’s Ag Outlook Forum estimates which shows plentiful corn ending stocks for 2023 and 2024. Losses were kept in check by news that Japan was in and bought 155 TMT of US corn overnight. Light support also spilled over from the stronger soybean market. Argentina weather forecasts calling for hot dry conditions for the next 5 to 7 days added support. Forecasts for rain in Brazil added support as this will slow down harvest and planting progress. Since June 21 March corn has lost $2.2125. That in itself should help corn push corn higher. As of Feb 16, Brazil’s first crop corn harvest was estimated at 29% complete vs 26% last week and 28% average. The second corn crop planting progress was reported at 39% complete vs 28% last week and 33% average.

In Wednesday’s session corn opened the overnight session lower but managed to trade with small losses due to a tight 2 cent range overnight. Early selling was tied to spill over pressure from the lower wheat and soybean complex. Light selling was tied to updated weather forecasts calling for rain in the next 1 to 5 days in Argentina as well as from more chances for rain in the 6 to 10 day. Another week of strong shipments helped to limit the pressure in corn. Dr Cordonnier left his corn production estimates for Brazil unchanged at 112 MMT and Argentina’s unchanged at 54 MMT. Corn has sold off more than $2.00 since June and at this point, no matter what the fundamentals say, is in need of a technical correction.

On Thursday corn opened the overnight session lower but managed to firm to trade with minor losses by the time the overnight session was drawing to a close. Early support was due to technical buying as corn has traded to a new contract low in 10 out of the past 11 sessions. The need to correct an extremely oversold market condition added support. A long list of lower production estimates out of SA added support. Rosario lower Argentina’s corn production estimate 2.5 MMT to 49.5 MMT. BAGE lowered their estimate to 56.5 MMT. On an interesting note, Brazil’s crop tour is not finding as promising results as USDA has been releasing. Rumors have the Biden administration ready to approve year-round E15, but it won’t go into effect until 2025. Talk that that the administration is looking at putting tougher climate restrictions on ethanol production, which would make it harder for ethanol to get subsidies for SAF added pressure.

Last week’s ethanol production was estimated at 1.084 million barrels, up 1,000 barrels from the previous week. Stocks were estimated at 25.5 million barrels, down 308,000 barrels from the previous week. Gas demand was unchanged.

March corn support is at $4.25 while resistance is at $4.53.

For the week, March corn was at $3.9975 down 16.75 cents. May corn was at $4.13 down 16.0 cents.