CBOT corn futures spent a majority of the session in the red, only to end slightly higher by the close. Dec continues to hold major chart-based support, and still there are many questions surrounding US yield potential. Much better rainfall lies in the offing across the Plains and Western Midwest, but will it fall in time? Our work continues to suggest that neither the bulls nor bears will be able to sustain much momentum until combine data is available sometime in early Sep.
GD/EX ratings this week improved 2% to 62%, vs. 74% on this week a year ago. Major boosts are noted in CO, TX, NE, IL and IN, which more than offset somewhat surprising declines in KY and MI. IA ratings are down another 3% to 61% (vs. 83% a year ago). This week’s numbers indicate recent rainfall has stabilized yield potential nationally, which at the least will fuel debate on whether yield is closer to 164 or 169? Only harvest data will provide any real clarity.
Otherwise, ethanol production margins continue to soar, and despite more than ample supplies, Brazilian fob offers rest at parity with US Gulf quotes. Look for choppy price action in the next few weeks, but we doubt a new price trend will be established.
