The bullishness of Monday’s ethanol mandate announcement is over. Corn tried to rally yesterday, only to close 3 ¼ lower. Funds sold 6,000 contracts. Ethanol production came out at 956,000 BPD, down 52,000 from last week. Stocks were 19,997 TB, up 370 TB. Margins are slightly above zero at most plants. Export sales were out this morning at 499 TMT. We were expecting exports to be 500 TMT to 1.1 MMT. This number should be considered negative. This is why export basis continues to be weak the last few days. There have been no deliveries. The dollar is lower this morning. Resistance in CH is $3.78 and then $3.84. Support is $3.66 and then $3.64. Yesterday’s break cut off farmer selling and we are seeing more of the same this morning. We remain in a $3.60 to $3.80 trading range for a while. Whatever support ethanol demand is giving is going to be offset by the cut in export demand. Look for a good chance to trade both sides.
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