Corn Weekly Comments May 19

Corn Weekly Comments May 19

To start the week corn opened lower but managed to shake off early selling pressure and push to post gains by the end of the night session. Early selling pressure spilled over from Friday’s report as traders try to wrap their head around the numbers from the report. Corn was able to shake off the early pressure once wheat rallied higher as corn tries to stay in with wheat. Heavier than expected weekend rains in the Northern Plains and western Corn Belt added strength was part of southern MN is reporting heavy flooding as is parts of central ND. Light support came from a better-than-expected export shipments estimate as last week’s pace was at the top of expectations. As of May 11, Argentina was reporting harvest progress at 32% complete vs 41% average. As of May 12, Brazil was reporting first corn crop harvest progress at 90% complete vs 90% average.

On Tuesday corn opened the overnight session lower and extended session losses throughout the night and into the day. Selling was tied to Monday’s Crop Progress report, which estimated 65% of the nation’s corn crop is planted. Although this was below expectations it is still far ahead of the 5-year average. Weather forecasts are calling for close to ideal growing conditions for the central and eastern Cron Belt while the western Corn Belt and Northern Plains are seeing improving conditions. Planting has resumed in the soggy northern regions and will start to see general activity if a few regions can miss Wednesday and Thursday’s rain. This will result in most getting in the field 2 days ahead of last year.

Also, on Tuesday the Ukraine Grain Association estimated Ukraine’s 2023 corn production at 21.1 MMT vs 27.3 MMT last year. It’s hard to believe, but the July/Sept spread traded to a new all-time high of 82.5 cents on Monday. This is a signal that supplies are tight, but that the market seems to be reluctant to admit. Like wheat, corn is being hit by risk off selling as the funds flex their selling muscle. Technically Dec corn is trading at levels not seen since the end of 2021 while July is flirting with contract lows.

In Wednesday’s session corn opened the overnight session higher but slipped to trade with losses by early morning. Corn extended session losses into the day session with early selling tied to another export cancellation form China, this time 272 TMT. Light selling was also due to almost ideal planting conditions in the central and eastern Corn Belt, which should allow for almost record setting planting progress. Weather forecasts are calling for the next 4 to 5 days to remain nice in the Northern Plains, which should allow for planting progress to advance, added selling pressure. The extension of the Black Sea Grain Initiative added light selling pressure. Wednesday’s close was not friendly to the corn, but it does not make a trend. If Dec corn closed below $5.00 again tomorrow, then we will have a problem.

On Thursday corn opened the overnight session lower and proceeded to extend session losses throughout the night and into the day session. Early selling pressure was tied to spill over pressure from the sharply lower wheat complex. Light pressure was due to good planting progress and forecast calling for warm dry conditions for the Northern Plains through the weekend, which should allow for good planting progress to occur in the Northern Plains and western Corn Belt. Last week’s negative export sales estimated added to the pressure as most are expecting to see more cancellations moving forward as there is still 2.8 MB of corn sales to China on the books. Corn was able to trim losses late in the session as profit taking and technical buying combined to try and help correct an oversold market condition. The new crop was able to bounce back above $5.00.

July corn support is at $5.75 while resistance is at $6.25. Dec corn support is at $5.00 while resistance is at $5.65.

For the week, July corn was at $5.545 down 31.75 cents. Dec corn was at $4.9975 down 9.0 cents.