Dec corn ended weaker but off session lows, and understandably the market has traded in a narrow range ahead of NASS’s next revision to US crop production. The average trade guess on ending stocks is unchanged at 2,360 Mil Bu, in spite of a likely modest boost to yield. Other numbers to watch on Thursday include Black Sea corn production, but of course S American supply & demand will be left untouched.
This week’s EIA report was modestly supportive. Ethanol production through the week ending Nov 3rd totaled 311 Mil Gal, again just shy of the all-time record. Residual use also continues at a record pace, and weekly ethanol stocks were down slightly.
Spot gasoline hit yet newer rally highs, and while geopolitical tension is noted, the rally is fundamentally based. US gasoline inventories continue to erode, and even crude stocks are down 6% from last year. Ethanol blending margins remain stout.
ARC estimates managed fund short corn position at 210-220,000 contracts, vs. 203,000 last Tuesday, and so unless US yield is put above 174, we doubt the market reacts much to Thursday’s result. ARC remains neutral, and we await clarity on S American weather.
