Afternoon Corn: Mixed day of trade ultimately resolved lower
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><div style=\"line-height: 1;\"><span style=\"font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Afternoon Corn: <br id=\"isPasted\"> <br>Mixed trade in the corn futures today. The market ultimately resolved lower, setting down 2-4 cents up-front and around one cent lower in later-dated (new crop) positions. Managed Money funds are believed net long roughly 225,000 delta-adjusted corn contracts. Cash trade was easier on the interior, while Gulf bids were steady/better.<br> <br>Early news influences were mixed. South Korea dipped their toes back in for feed coverage, with NOFI picking up 140k metric tons of optional origin corn, along with a cargo of feed wheat. MFG bought 132,000 metric tons of corn, while FLC moved for a cargo of feed wheat. If the U.S. did not win the business, they competed awfully hard? Working against this some was a rebound in the US Dollar; over the past two days, the greenback has earned back nearly all of Monday’s break.<br> <br>The report-du-jour was the weekly EIA. U.S. ethanol production slipped less than -1% wk/wk to a 1.102 mil bbl/day rate; we were expecting a slightly larger pullback. Over a marketing year, such a rate of production would utilize over 5.70 billion bushels of corn. Blender demand extended the prior week’s post-Christmas plunge, falling another -9%, and has declined over -15% in two weeks. Exports helped make up some of the difference, rising to 155k bbl/day vs. 99k last week (and on par with 157k last year). Ethanol stocks built by 2.15%, which was less of a build than we expected, to 24.148 million barrels (1.014 billion gallons). Despite a ‘less bearish than feared’ report, ethanol futures sold off some today. We think an average Midwest ethanol plant is losing 5 c/gal, net of all costs.<br> <br>Note that tomorrow will be a shortened trading day, as the U.S. mourns ex-President Jimmy Carter. The export sales report will be pushed back to Friday morning. As far as we know, the CFTC report will be out as usual Friday afternoon?<br> <br>Elsewhere, other end-user markets were mostly steady or easier. Cattle finally corrected after a broad three week rally? Weekly USDA reporting found broiler egg sets up +4% yr/yr with chicks placed up +2%. Weather may have exerted a slightly bearish tug today as shower probabilities improve for the Jan 17-21 slot for Argentina? Most news services have published their estimates ahead of Friday’s USDA report.<br> <br>In the options, volatility eased a little lower today. There was active trade overnight in March $5 Calls; will be interesting to see tomorrow if those are opening or closing (OI was 12k coming into the day)? Calendar spreads were weaker. Corn lost a little ground to the beans but gained on the wheat. Looking at the charts, tentative March Corn resistance at $4.60 held last week, and this level remains operative. Support in the $4.45-4.50 vicinity also held, as we expected and also remains operative. $4.35 would be the next level of support, and we feel that is a critical level for bulls to defend to maintain market leadership. The RSI is no longer overbought, sitting in the mid 50’s.<br> <br>KJ </span></div></div>