Analysis: Corn

Corn Rallies Despite Harvest Acceleration

Sep 22, 3:16 pm | Corn

Corn followed neighboring soybeans to modest gains, and ARC mentions managed funds this week hold a larger short position than expected. Active harvest lies ahead, and progress rather quickly in October amid warmth and dryness. But cash wheat prices continue to move higher, including feed wheat, and as mentioned at midday the short corn trade has gotten rather crowded.   Managed fund as of Tuesday were short a net 135,000 contracts, up 15,000 from the previous week and the second largest mid-Sep total on record (second to last year). ARC estimates funds’ short position this evening just marginally smaller at 125-127,000 contracts. New selling must come from the farmer, who is not at all anxious, particularly as bins were cleared…

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Yield Changes in October

Sep 22, 3:13 pm | Corn, Soybeans

Since 1990, there has not been a strong tendency for NASS to either raise or lower the national soybean yield estimate in the October crop report. There have been 11 years that the yield was lowered by an average of 0.9 BPA, 12 years that NASS’s yield increased by an average of 1.1 BPA, and 2 years that the yield was unchanged. More recently, yield has been unchanged or higher in 8 of the last 13 years, with only minimal declines noted. However, there have been some surprising declines that have developed as crops have matured. The largest decline occurred in 2003, when both pod weights and pod counts declined in October, and continued to fall into the January Crop…

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Corn Unwilling to Move; Big Harvest Weekend Lies Ahead

Sep 21, 3:50 pm | Corn

CBOT corn futures again did very little, and enthusiasm is lacking with the harvest quickening.  Soaking rains will impact a majority of the Plains and NW Midwest early next week, but otherwise the 30-day outlook features warm/dry weather (the Oct 6-20 precip anomaly forecast is below). A flood of combine data is becoming available. Early yield data has been highly variable.     US export sales through the week ending Sep 14th totaled 21 Mil Bu and featured moderate sales to Japan & Mexico, but no other surprising destinations. Total 17/18 commitments rest at 434 Mil, and an average weekly pace of 28 Mil Bu is needed to hit the USDA’s annual target. Export demand certainly won’t be a major…

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Corn Recovers Slightly; Exceeding $3.55 Next Chore

Sep 20, 4:20 pm | Corn

Dec corn traded in another 4-cent range, ended modestly higher, and whether the contract can trade through $3.55 – and thus break through its 20-day MA for the first time mid-July – will be watched closely. ARC notes that both chart-based support and resistance continue to narrow.   Otherwise, the weekly ethanol report was in line with analyst estimates – though amid further losses in US gasoline inventories crude rallied $1/barrel, settling above $50 for the first time in 4 months. US ethanol production and blending margins remain elevated. Ethanol production last week totaled 304 Mil Gal, down slightly on the week, but up a hefty 15 Mil from this week a year ago. More importantly, non-domestic disappearance continues at…

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Corn Ends Lower Again; Harvest, S American Weather Cited

Sep 19, 4:27 pm | Corn

Dec corn fell another 3 cents as ongoing Central US warmth should accelerate crop maturity, and as there are signs of better rain chances in Southern & Central Brazil beyond the next 10 days. ARC views the recent break as mostly chart-driven, and major tech support & resistance lies at $3.45 and $3.55, respectively.   The EIA’s weekly energy report, due Wed AM, should include steady (and record large for the week) ethanol production, but key will be the pace of non-domestic ethanol disappearance. So far, non-domestic use has shown no signs of slowing despite Brazil’s approved tariff on imports from the US. Brazil’s ethanol market continues to rally, and US production & blending margins remain elevated.   South America’s…

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Dec Corn Unable to Exceed Technical Resistance

Sep 18, 4:45 pm | Corn

Dec corn has been unable to exceed its 20-day moving average since early summer, and again failed to do so today. Otherwise, it was a rather slow day, news-wise, and crop maturity should at least catch up with average in the next two weeks as abnormally warm temps are sustained. ARC also mentions that EU/Black Sea feed wheat prices continues to move higher, which should allow for better corn demand into East Asia from all origins. Funds sold an estimated 6,000 contracts of CBOT corn.     Maturity as of Sunday reached 34%, vs. 50% on this week a year ago and a longer term average of 45%. No frost is indicated – and in fact abnormally warm temps will…

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Corn Ends Steady; Harvest to Accelerate in Late Sep

Sep 15, 4:52 pm | Corn

Corn traded in just a 3-cent range, with again limited news and outside influences noted. Crude ended mixed, but similarly uneventful, and amid warming temps harvest will expand northward rather quickly in the next several weeks. Combine yield data will drive short term direction.   Managed funds through the week ending Tuesday were short 119,000 contracts at the CME, up 10,000 from the previous week, which is the second largest net short as of mid-Sep since record keeping began in 2006. Funds’ net position this evening is pegged between 115-120,000, the point being new bearish info has to emerge to attract new selling.   Longer term, ARC’s view is that trend/above yields must be confirmed in South America for spot…

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Corn Yield Debate Ongoing; Crude Approaches $50

Sep 14, 2:34 pm | Corn

Corn futures ended slightly higher, as actual yield data is just weeks away. Following the flood of bearish news since early Aug, combine reports much confirm NASS’s expectation to renew bearish sentiment. Crude is again approaching $50/barrel, and a push to produce elevated levels of gasoline lies in the offing following two devastating hurricanes. Note that US gasoline inventories through the week ending Sep 8th were down a hefty 8.4 Mil Barrels to 218.3 Mil, a new 1.5-year low. As such, ethanol production and blending margins remain rather stout.   However, US export demand continues to suffer, particularly to non-traditional destinations such as Mexico. New crop weekly sales through last Thursday totaled 41.2 Mil, a sizeable total, but cumulative 17/18…

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Corn Ends Unchanged Following USDA Report

Sep 13, 3:35 pm | Corn

Corn traded higher overnight and was positive through most of the day, though late day selling put December through May contracts back to unchanged at the close. Funds were estimated sellers 5,000 contracts at midweek.   The latest update to the Brazilian corn lineup shows just over 1.7 MMTs have sailed in September, with another 3.2 MMTs that are scheduled to sail by months end. If realized, total exports of 5 MMTs would be just under August exports, but still more than double last year and the largest September export figure on record. Cumulative Mar-Feb exports at just over 15 MMTs would also be a record shipment pace. Brazil is in the process of shipping out a monster crop, though…

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