A higher AM start had March corn back above the 50 day moving average. But the rally was short lived, as cash selling pressure emerged. Elevator and hedge related brokers report that US farmers used the biggest daily rally since October to make cash corn sales. The selling persisted into the close as producers shed stocks to raise cash. Funds ended as net buyers of 1,200 contracts.
The weekly ethanol data was supportive and confirmed a recovery in demand.
The EIA’s weekly Petroleum Status Report showed that US ethanol production snapped back and was the best in 3 weeks. US biofuel plants produced nearly 312 mil gallons, while slightly better refinery/blender demand was noted. Weekly ethanol stocks ticked slightly higher and were at 108% of a year ago. Cash ethanol prices are holding above the lows scored back in December, and estimated production margins across the Midwest are showing profits that range from 1-4 cents/gal in IA and NE, to $.15/gal in IL.
The longer term outlook for corn is improving with South American weather to key 2018/19 US corn exports.