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 cash corn market has been stale in recent weeks. Argentina is still the world’s low cost origin – and by $.20/Bu – but as evidenced in the graphic at left, feed wheat does not look to displace as much total corn demand this year. It may be premature to lower US corn exports below the USDA’s projected 1,850 Mil Bu.
We remain patient with respect to extending sales, but do note that downside risk in S American corn, and world feed/milling wheat prices, is limited.