In a surprising turn of events, the lead month corn contract closed below the $4 mark on Friday, marking the first time since the fall of 2020. Simultaneously, the March options expired, leading to up to 9k $4 puts being converted to futures. This shift caused a ripple effect throughout the market, with other front months experiencing a 3 ¾ to 5 cent decrease for the week. The net result was a 16-cent decline for May and a 9-cent drop for December.
Recent Weekly Commitment of Traders data unveiled that corn specs added 16k new shorts, accompanied by 10.5k fewer longs, resulting in a net short position of 340.7k contracts as of 2/20. This net short marks a new record for the group dating back to 2006. On the other hand, commercial corn hedgers boosted their long positions, elevating their net long to 58,342 contracts from 40.2k the previous week.
Additionally, the weekly Export Sales data revealed that 820k MT of corn was sold for the week ending on 2/15, surpassing traders’ expectations of at least 700k MT. The USDA reported commitments at 37 MMT, showing a significant 30% increase compared to last year’s pace.
On the ethanol front, EIA data displayed a 1k bpd rise in ethanol output to 1.084 million barrels per day for the week ending on 2/16, while ethanol stocks decreased by 308k barrels to reach 25.5 million. Noteworthy developments include the EPA’s decision to allow the sale of E-15 gasoline for the entirety of 2025. In the past year, a temporary waiver had been granted for E-15 sales in the summer, although one has not yet been issued for this year.
Mar 24 Corn closed at $3.99 3/4, down 6 1/4 cents,
Nearby Cash was $3.81 1/2, down 6 1/8 cents,
May 24 Corn closed at $4.13 1/2, down 5 cents,
Jul 24 Corn closed at $4.26 1/4, down 4 1/2 cents,
As of the publication date, Alan Brugler did not hold any positions (directly or indirectly) in the securities mentioned in this article. The information provided in this article is solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
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