Corn - Just My Opinion

May Corn closed 2.5 cents lower ($3.60), July 2.5 cents lower ($3.68.5) & Dec 1 cent lower ($3.89)

May Chgo Ethanol closed $0.013 cents a gallon higher ($1.315) & June $0.013 cents lower ($1.328)

Weekly Corn Export Inspections - 1.035 M T. vs. 1.000-1.300 M T. expected Cumulative 30.714 M T. Target 60.33 M T.

US Corn Planted - 2% vs. 2% expected vs. 2% 5-year average

Mondays price action is suggesting we may see a bearishly construed old crop Supply-Demand report tomorrow. The average trade guesstimate for carryout is 1.991 billion bu., an increase of 156 million bu. Personally I think the number could be even higher. Bear spreads, old crop to new crop, were noticeably working. On the 29th of March when the USDA gave us the bearish stocks and acreage data the July/Dec spread traded out to 20 cents under. Last week the spread traded into 17 cents under. Today the spread gave us new contract lows at 20 cents under. Weather fears over the timeliness of spring planting are offering support to the new crop. Short term forecasts are still calling for above normal moisture with normal to below normal temps for much of the Corn Belt. Further out Im finding mixed ideas on weather; some saying a continuation of the above normal moisture while others are suggesting maybe some moderating with this trend.

The interior corn basis shows a tightening bias as producer movement remains slight at best. The processor continues to show the best basis. River locations continue to improve despite some lingering effects from high water levels. Water levels along the central riverways will stay high after this weeks forecasted rain event. Gulf bids continue to ease after March 29ths spike high. The May/July corn spread ran steady on the day; bears spreads work July onward.

Depending on the size of the projected carryout will dictate whether or not old crop corn sees new contract lows. Im beginning to develop the idea that once we see the new updated old crop carryout projection trade focus will move to new crop and its respective planting conditions. Price charts are bearish looking especially for the old crop. New crop doesnt look to spiffy either but given the ongoing concerns around planting weather I doubt new crop takes out the lows from last September. The biggest deterrent to much lower prices from current levels is the size of the spec short. Bear markets are sustained through liquidation. The biggest long in the market is the producer. I doubt hell sell any corn until his new crop has been planted and is up and growing.

Daily Support & Resistance for 04/09

July Corn: $3.65 (?) - $3.73

Dec Corn: $3.85 - $3.93

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Contact me! Tom Fritz, Agricultural Market Analyst at 1.800.786.4475.

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