Dec corn again took a breather after Monday’s decline and another surge in open interest – which at 1.7 Mil contracts is the largest since 2010. The trade is well aware that funds’ position this evening is by far record large, and the short side of the market is getting rather crowded. Argentine fob basis continues to inch higher, and the EIA’s weekly ethanol numbers again featured near record production and moderate non-domestic blending disappearance – Brazilian ethanol continues to rally and is currently quoted 30% above the US Gulf.
US ethanol production last week totaled 310 Mil Bu, down 1 Mil from the prior week but up 11 Mil from the same week a year ago. Residual disappearance continues at a record pace. Crude/gasoline stocks remain well below last year, and until large shale production is confirmed in 2018 ARC expects energy markets to find support on even moderate breaks.
There’s little to do ahead of key South American growing stages, and ARC expects weather premium to be added to price should Argentine dryness continue beyond early December. Funds are not going to stay record short!
