Dec corn traded in another 4-cent range, ended modestly higher, and whether the contract can trade through $3.55 – and thus break through its 20-day MA for the first time mid-July – will be watched closely. ARC notes that both chart-based support and resistance continue to narrow.
Otherwise, the weekly ethanol report was in line with analyst estimates – though amid further losses in US gasoline inventories crude rallied $1/barrel, settling above $50 for the first time in 4 months. US ethanol production and blending margins remain elevated. Ethanol production last week totaled 304 Mil Gal, down slightly on the week, but up a hefty 15 Mil from this week a year ago. More importantly, non-domestic disappearance continues at a record level – in spite of Brazil’s recently passed tariff on imports. Cumulative weekly residual is at left; official exports in July totaled 117 Mil Gal, the second largest on record.
What little Midwest harvest data is available has been mixed – the real yield story seems to be in disappointing beans – and moving forward ARC’s focus is on rising milling/feed wheat prices and this year’s rather late start to Brazil’s wet season. A close above $3.50, Dec, would further confirm seasonal lows. ARC awaits future rallies to make any new sales.