Analysis: Corn

Corn Tests Tech Support on Weak Energy Markets

May 25, 4:05 pm | Corn

  The US weather pattern offers a more seasonal pattern to the Plains and Western Midwest in the next 10 days, but maintains cool temps and unwanted showers in the Eastern Corn Belt. Measuring nationwide yield potential remains difficult, but our work does suggest additional rain in IL, IN, ON and MI is not a positive, and is certainly not needed. Otherwise, the dollar rebounded slightly and crude fell to losses of $2.75/barrel.     US corn export sales through the week ending 18 Mil Bu, down 10 Mil from the period week, and importers are slowly beginning their transition to South America. Argentina’s harvest progress has reached 36% complete this week, vs. 29% on this date a year ago,…

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Corn Does Little Ahead of Holiday; Ethanol Data Again Mixed

May 24, 4:53 pm | Corn

July corn traded in a 3-cent range, and aside from this week’s EIA report, fresh news is lacking. The US dollar ended weaker by the session’s end, and some grain-soy spreading was noted. Funds look to maintain their record net short position into the three-day weekend, but thereafter it’s all US weather. The June outlook trend (wetter or drier) next Monday night will be critical.   US ethanol production through the week ending May 19th totaled 297 Mil Gal, down 5 Mil from the prior week but still a hefty 18 Mil above the same week a year ago. Ethanol stocks fell 31 Mil gal amid solid domestic blending and, more importantly, a boost in export interest. Brazilian ethanol premium…

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Corn Subtracts Premium Following Crop Progress Report

May 23, 4:50 pm | Corn

There’s still a  lack of news (and volume), and trading centered on a rebound in the US dollar, weaker gasoline and ethanol prices, and on Monday’s crop progress report. US corn planting progress is in line with average, though acres (1-3 Mil) will have to be replanted. Selling also emerged following by-state conditions, which are displayed in the table at left. It’s far too early to glean much from weekly ratings, but the surprise is just how highly corn is rated across the Delta & W Midwest where flooding rains have recently missed.   Otherwise, futures-based ethanol margins are perched at multi-week low $.30/Gal, basis spot. Brazil’s cash ethanol market also continues to retreat, though slowly, and it’s important for…

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Initial Corn Crop Condition Ratings and Yield

May 23, 4:43 pm | Corn

NASS is expected to report initial national crop condition ratings for the 2017 corn crop next week. Individual state crop reports have included ratings as the information has been available, but so far the results have been sharply mixed. GD/EX ratings across the Delta and Southern states have so far been higher to sharply higher, with the largest increase noted in LA, where 85% of the crop is rated as GD/EX, or 39 percentage points higher than a year ago. Farther North, just 51% of the IL crop has been rated good or excellent, versus 69% last year, and ratings in MO are at 52% versus 75% last year. But in other Cornbelt states, 82% of the MN crop is…

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Corn Adds Modest Weather Premium; Eastern Midwest Too Wet

May 22, 4:39 pm | Corn

A weaker US dollar and ongoing heavy rainfall in the Eastern Corn Belt triggered a moderate week-opening rally (with weak volume). Our work suggests that spring rainfall in certain areas of the Corn Belt looks to exceed the threshold that adds to yield potential, and as such we doubt breaks can be sustained into the first part of June. Funds bought/covered an estimated 3,000 contracts.   The US corn crop through Sunday was 84% planted, unchanged from the same day a year ago and very close to the longer term average. Early crop conditions are still very mixed. GD/EX in IL this week is pegged at 51%, vs. 69% a year ago; ratings in MO rest at 52%, vs. 75%…

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Corn Rebounds with Brazilian Real; Soaking Rain Working Across Midwest

May 19, 4:14 pm | Corn

The Brazilian real captured roughly half of Thursday’s loss, and in general it was a much better day for raw materials. Crude rallied $1/barrel, with ethanol margins rising slightly. Prevailing trends still include much cheaper South American offers beginning in July, but also a falling US dollar and cool/wet Central US weather, and as such ARC maintains that the long-established range will hold through pollination – which may not occur until mid/late July across the Eastern Corn Belt.   Managed funds as of Tuesday held a net short position worth 204,000 contracts, down just 5,000 on the week. ARC estimates their net position today at a still sizeable 192-195,000. Note that we hear of stand issues in parts of the…

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Corn Falls on Brazilian Woes, US Climate Forecast

May 18, 4:43 pm | Corn

CBOT corn futures fell 5-6 cents, and are again testing recent lows – which have so far held rather well. Brazilian corn exporters are relatively better positioned to capture demand this summer amid a weaker real, but ARC notes political chaos doesn’t change physical supply and demand. NOAA’s updated climate forecast is completely lacking of drought emergence, though the issue in the near term is too much rain and the lack of heat. We maintain that choppy trading will persist and we advise against chasing today’s break.   Argentina’s corn harvest this week has reached 33% complete, up just 1.3% on the week and slightly below average. Argentine producers will now focus more on gathering beans, and heavy isolated showers…

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Corn Follows Wheat Higher; Ethanol Data Mixed

May 17, 3:41 pm | Corn

July corn rallied 4 cents on fund short covering, a decent boost in weekly ethanol production and as Egypt’s tender results today triggered widespread uncertainty over the availability of Black Sea grain in the next 30-45 days. Active planting in the E Midwest through the next 48 hours (and all of this week) tempered the rally, but we maintain this is no place to turn bearish.   Ethanol production last week totaled 302 Mil Gal, up 6 Mil from the previous week and up a heady 8% from this week in 2016. The USDA’s ethanol demand draw still may be a bit too low (cumulative weekly ethanol production is up 5.1%; the USDA’s forecast is up just 4.3%). However, the…

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