Dec corn continues to eye the Sep contract’s low ahead of first notice day at $3.30-3.35. The USDA’s November WASDE confirmed there’s an overabundance of supply, particularly across the Plains, and large deliveries are likely. Funds, however, are now short an estimated 245,000 contracts, a new record, and ARC doubts sub-$3.30 spot futures lies in the offing. Biofuel margins remain solid in spite of today’s drop in crude & gasoline futures. Argentine basis is strengthening, albeit slowly.
South America’s Dec-Feb climate outlook will be updated Thursday morning, and with La Nina to be established rather soon, it’ll be interesting to see NOAA’s opinion on rainfall in Argentina and S Brazil. Lite & scattered showers will impact parts of Central Argentina next week, but a trend of declining soil moisture will continue into late Nov.
But it remains that either a sharp cut in US acreage or S American yields is needed to balance major exporter supply & demand. More than anything a lack of fresh input into the holidays will sustain listless trading. Sales are not advised at current prices.
