Funny the difference a crop report makes. Corn exploded after the report, trading 8 higher on short covering frenzy and settled 5 higher yesterday, using the USDA report as an excuse. Funds bought 15,000 contracts (maybe more). The S&D has some unexpected changes in production, most of the trade was looking for a small increase in production while the actual number dropped 53 MB because of yield and total supply was down 43 MB. Demand also changed with food dropping 10 MB and exports reduced 50. This increased carryout 17 MB to 1.802 BB (a 48 day supply). Yesterday’s short covering rally did bring out some farmer selling. Commercials continue to be aggressive buyers. Basis seems to be steady in the west and firmer in the central and eastern Corn Belt. This firmer basis near the river is tightening spreads slightly. Yesterday’s market action is probably not the catalysts to cause any kind of major rally. We expect a little volatility for a few days and then back to same old sideways to lower grind. Resistance in CH is $3.64 and then $3.68. Support is $3.49 and then $3.42.
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