Beware of night time rallies as of late daytime trading erases those rallies. After easier Monday night openings corn prices rallied spurred on by the soybean rally. The nighttime gains were almost totally erased in the Tuesday day session. A general lack of demand for US corn (both domestic and export) goes far in offsetting the idea that we have a smaller crop out there vs. what the USDA told us earlier this month. I dont think the market is going to fall apart but move into a trading range affair between the mid-high $3.70s and the mid-high $3.90s at least until we have a better handle on what we have out there. The early frost freezes most definitely impact quality. My only fear is if the lack of quality becomes a big deal. Quality issues are a spread/basis play while not offering much help to the flat price as no one is all that interested in junk corn.
The interior corn basis vs. Mondays postings are a mixed affair. The Ohio River is 1 cent better, Cedar Rapids 2 cents better while Linden, IN is down 15 cents. All other interior locations ran unchanged on the day. The Gulf continues to show a firm bias but not running away. One year ago the Gulf basis was running 35/40 over with a flat price right around $3.70. Currently we are 39/43 over with a $3.88 flat price. The current crop size is about 600 million bu. less that last year. One might think the price appreciation would be greater this year but its not and that is due to the current poor demand.
Other than repeating the corn market is moving into a trading range affair for the time being I dont know what to tell you. If $3.84-$3.82 (Dec) doesnt hold the current fade it would suggest something down towards the mid-high $3.70s.
Daily Support & Resistance for 10/23
Dec Corn: $3.84 - $3.94
March Corn: $3.96 $4.06
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