On Wednesday, the March corn futures contract had its highest close since November 27, 2020.
It was a positive technical development for March corn. It was impressive, given the weakness in the other grains. Talk that many traders are adjusting their Argentine production estimates lower for this season due to dry weather lent support.
Ethanol production, for the week ending December 11, averaged 957,000 barrels per day. This was down 3.4% from the previous week and down 10% from a year ago. Total ethanol production for the week was 6.699 million barrels, and the amount of corn used is estimated at 96.7 million bushels. Corn use for ethanol needs to average 97.4 million bushels per week to meet this USDA estimate for 2020/21. Ethanol stocks came in at 22.95 million barrels, the highest since May 22 and up 3.9% from the previous week and up 5% from last year.
Brazil is close to an agreement that would allow exporters to boost sales of corn to China, a move that could threaten U.S. dominance.
Talks between the governments of Brazil and China are in advanced stages.
China’s total corn imports could reach 22 million tonnes this season, according to the USDA’s Foreign Agricultural Service. Goldman Sachs Group is estimating China’s purchases at 33 million. The Chinese government will offer 103,431 tons of corn that it has stored in the country’s northeast region at auction on Tuesday, according to the National Grain Trade Center.
TODAY’S MARKET IDEAS
March corn support is at $4.25¼ and $4.22 per bushel, with $4.30 as resistance. If the market closes through resistance, it would leave $4.49 as the next upside target. Consider buying May corn futures near $4.23 with resistance at $4.32½ and $4.50¾ as next upside targets.