Analysis: Corn

Corn Rallies Again; Market Digesting Expanding Drought

Jul 20, 4:20 pm | Corn

The corn market’s central focus now is projected 10-day rainfall in IA and Southern IL, and today’s updates (unfortunately) feature ongoing dryness there into the final days of the month. 48-hour accumulation is at left, and only a small pocket of IA benefited from Wednesday’s system. The very latest model runs keep meaningful precip into next week isolated to far NE IA and N IL, and so the driest areas look to get drier in the near term.   US corn export sales through the week ending July 13th totaled 18 Mil Bu, roughly triple the previous week but not overly exciting. Exporters have now sold 99.5% of the USDA’s forecast with six weeks remaining in the crop year. Whether…

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Corn Adds Weather Premium; Market Shrugs Off Wet GFS Forecast:

Jul 19, 4:54 pm | Corn

The GFS model has been updated, and it’s in better agreement with its EU counterpart. However, the GFS is still much wetter in IA in the next 10 days, but trade seems to be inching its bias toward the EU based on performance to date. How much rain falls across the W Corn Belt in the next 72 hours will be critical, and Thursday’s drought monitor will expand abnormal dryness there.   This AM’s weekly energy report is viewed as bearish ethanol, but supportive crude & gasoline. Ethanol stocks as of July 14th totaled 930 Mil Gal, up 40 Mil on the week and up 4.6% on last year. US export demand is in retreat.  US crude and gas stocks…

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Plains Weather & Crop Production

Jul 18, 4:36 pm | Corn, Soybeans

Drought is expanding, and amid current forecasts calling for near complete dryness across a bulk of the Plains, ARC looks for condition ratings to fall, not rise, in the next two weeks. However, even simply accounting for plunging crop conditions across the Northern and Western Plains, substantial US yield adjustments lie in the offing. ARC notes that not that long ago the Dakotas were considered as being fringe producing states; now they account for some 10% of US corn area. Kansas, too, has seeded a record 5.3 Mil Acres in 2017. Based on weather to date, ARC’s work projects combined yield in NE, SD and ND to exist 12-13% below trend, which along with slightly higher abandonment results in combined…

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Corn Lacks Direction, Fresh News

Jul 18, 3:49 pm | Corn

Corn ended slightly higher following NASS’s crop condition update Monday evening, and as the trade so far remains skeptical of GFS model output. The EU model also trended just a bit wetter next week, but its solution implies ongoing soil moisture declines into early August. The forecast is neither overly bullish nor bearish, and so we should expect limited price action in the days ahead. Funds bought an estimated 5,500 contracts today.   The question remains the effect of heat and dryness in July on national corn yield, and the potential for any improvement should the pattern change in early August. ARC detailed in this evening’s wire how already yield loss across the Central Plains is impacting the balance sheet….

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Corn Lacks Direction Amid Uncertain US Weather

Jul 17, 4:51 pm | Corn

Corn ended mixed, but little changed. Crop conditions fell as expected, and the most likely Central US weather trend through the end of July features ongoing heat and dryness, and thus further declines in ratings. Note that condition ratings begin to correlate rather strongly with NASS yield in the next 1-2 weeks. Simply losing yield across the C Plains suggests US yield is no better than 166 BPA. Until crop size is known, the market will find ample support on breaks.   The crop this week is pegged at 64% GD/EX, vs. 76% a year ago and the lowest for this week since 2012. Oats conditions also fell slightly amid ongoing moisture loss in the Dakotas. Key is that, in…

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Corn Ends Week Stable on Renewed Hot/Dry Forecast

Jul 14, 2:23 pm | Corn

The major forecasting models this evening are warmer & drier than Thursday’s runs, and so modest premium was added to the market today. Next week will be especially hot, and highs in the 90s will reach into the Central Midwest. There’s still no substantial evidence of a pattern change into the final days of July, and a slow decline in crop ratings is anticipated.   AgResource also mentions that a bottom in South American cash prices lies the offing – though a bottom at historical lows. Fob basis in Brazil and Argentina is a bit higher today, and the seasonal trend shows that lasting lows are typically scored in the second half of June. As the market there finds demand,…

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Corn Falls Sharply on Export Sales, Hints of Cooler Weather

Jul 13, 4:40 pm | Corn

ARC estimates that as of early this week managed funds had established a very small net long position, which has been steadily liquidated since. However, we also note that any changes in the US weather pattern won’t occur in the next 10 days, and our bet is that US yield falls between 165-167 Bu/Acre based on expanding drought across the Plains/W Corn Belt. Await rallies to extend sales and hedges.   Otherwise, US export sales continue to suffer as South American ship lineups grow. US sales through the week ending July 6th totaled just 6 Mil Bu, vs. 5 Mil during the prior week, and should this pace continue the USDA is unlikely to raise its US export forecast.  …

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Corn Market Does Little Ahead of Report; Weather Still Threatening

Jul 11, 4:59 pm | Corn

The USDA on Wednesday is expected to tweak its old crop balance sheet slightly, and might lower new crop yield 1-2 Bu/Acre, but otherwise corn data should be rather uneventful. However, ARC does mention the North American weather forecast is getting worse, not better, and heat looks to reach into the Western Midwest by the middle of next week.   CONAB this AM raised Brazilian corn production 2 MMTs, which was largely expected, and South American basis remains historically weak. Argentine basis is still negative, but at the same feed and milling wheat prices have surged. This is the opposite of last year. South American exporters will undercut all others through late autumn, but S American surpluses won’t fully displace…

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