Corn Weekly Comments June 7

Corn Weekly Comments June 7

To start the week corn opened the overnight session lower but managed to recover to post small gains by the time the night session was ending. Early support came from reports that Spain was in and bought 110 TMT of US corn overnight. Light support also spilled over from the rally in wheat. Gains were kept in check by a lower soybean complex and from thoughts that since the corn crop is planted, rain makes rain. Modest gains came from the realization not all of the intended corn acres will get planted and that the Northern Plains (MN, SD, ND, IA) will have prevent plant. As of May 31, Brazil’s first crop corn harvest activity was estimated at 94% complete vs 92% last week and 99% average. The second crop corn is 1% harvested vs 1% average. Corn has erased all of May’s gains and is currently sitting at levels not seen since April 19.

In Tuesday’s session corn opened the overnight session lower and maintained minor losses throughout the night session. Corn was the best performer on Tuesday as corn did try and trade with gains early in the day session but the selling pressure from the lower wheat and soybeans proved to be too much. Early selling was tied to Monday afternoon’s Crop Progress report, which like wheat, showed a 5% better than expected crop rating for corn. Losses were kept in check by thoughts that not all of the intended corn acres will get seeded. Dr Cordonnier lowered his acreage estimate for corn 500,000 to 89.5 million but kept yield unchanged at 179 bu. Production was estimated at 14.62 BB. Selling was also tied to pressure from long-term weather forecasts calling for average temps and drier conditions for the rest of June. Technically corn is sitting at major support and needs a correction. Tuesday’s performance did not hurt corn, but then again, it did not help either.

On Wednesday corn opened the overnight session steady but slipped lower and held losses throughout most of the night session. Early pressure spilled over from this week’s poor performance as corn has traded lower for 6 straight sessions in a row, the longest losing streak in 10 months. Weather forecasts calling for drier conditions caused most of the pressure. Losses were trimmed once the day session got under way. Support came from reports of lower-than-expected production out of the RDGS in Brazil due to flooding. Weather forecasts calling for hot dry conditions for the Black Sea for the next 14 days added support. Last week’s ethanol production was estimated at 1.072 million barrels, up 4.000 barrels from the previous week. Stocks were estimated at 23.05 million, down 155,000 barrels from the previous week. Gas demand slipped slightly.

Corn opened the overnight session steady to higher and proceeded to extend session gains throughout the entire session on Thursday. Early support came from technical buying as traders try to correct an oversold market condition. Corn had traded lower for 7 straight sessions, which is the longest selling spree corn has seen in 10 months. Light support came from reports of an unknown destination coming in and buying 152 TMT of US corn. Last week’s impressive export sales pace added support. Last week’s sales came in over 1 MMT, which was at the top of expectations. Expectations that not all of the intended corn acres will get planted added support as although the forecast is calling for warmer drier weather, fields are not drying out as fast as expected.

As of Sunday, there was 9% of the nation’s corn crop left to plant, or roughly 7.6 million acres. The states with acreage left are IL: 1.1 million, IN: 663,000, IA: 896,000, MN: 553,000, ND: 532,000, SD: 360,000, and WI: 608,000.

Support for July corn is at $4.35 while resistance is at $4. 75..

For the week, July corn was at $4.4875 up 2.5 cents. Dec corn was at $4.6725 up 0.25 cent.