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Grain Spreads: Realities in Corn
Commentary Corn drifted lower on turnaround Tuesday action as the market dropped to near term lows. Month and quarter end plus squaring up ahead of Thursdays on farm stocks may be attributed to the weakness. It's tough to sustain rallies without meaningful demand longer term and with increased competition coming from Argentina and then Brazil in the weeks to come as corn harvest advances in Argentina and begins in Brazil. The average trade guess for corn for planted acres is 91.77 million acres. The range of guesses is 90 million on the low to 93.47 on the high. Last year acres were 94.64. Will the experts prove right this year? It always seems that the predictions are less corn and more beans, but the predictions never seem in my view to turn out that way. Farmers love planting corn. It is just that simple. The average trade guess for on farm stocks has corn at 8.427 billion bushels. (8.128 to 8.568) This is where we have seen surprises before. Wide range of estimates. Last year’s stocks at this time of year were 7.396 billion. This years on farm stocks is 14 percent higher year on year and a 5-year high. Crazy news regarding port shutdowns in Baltimore and bird flus in Texas affecting cattle dominated headlines today. I say it's best to eliminate the noise and focus on the chart. May corn is still the most actively traded on the chart. Support for the remainder of the weeks is 424/22. A close under and its 4.08. A close under 4.08 and its 4.00 (15% down for year and then the trendline at 3.90. (yikes) Resistance is 4.48/4.54. A close over here and the next levels are 4.58/4.62. in my opinion Trade Ideas Futures-N/A Options-N/A Risk/Reward Futures-N/A Options-N/A Please join me for a free grain webinar this Wednesday at 3pm Central. We discuss supply, demand, weather, and the charts. Sign Up Now  Sean Lusk Vice President Commercial Hedging Division Walsh Trading 312 957 8103 888 391 7894 toll free 312 256 0109 fax
Walsh Trading 53 W Jackson Suite 750 Chicago, Il 60604
On the date of publication, Sean Lusk did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. |
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