Afternoon Corn: Funds used the recent rally to put back out a few shorts
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><div style=\"line-height: 1;\"><span style=\"font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Afternoon Corn: <br id=\"isPasted\"> <br>Corn futures maintained a downward heading to conclude the week, finishing the day 3-4 cents lower. The weekly chart reports an 11 cent gain (and a gap higher), though this was all by virtue of last week’s Sept contract expiration. The Dec futures contract finished 11 ½ cents lower for the week.<br> <br>CFTC Commitment of Traders report after the close found Managed Money traders used the recent market rally to re-establish a few shorts. For the week ended 9/17, they were net sellers of 2,687 contracts. Small (non-reportable) traders were the largest buyers (net buyers of 14,025 corn). When including recent activity, we think Managed Money is heading into the weekend net short 145,000 delta-adjusted contracts.<br> <br>Overall, it was a very quiet news week, which likely allowed structural factors to drag futures prices lower. For one, it’s harvest, and a dry start to the weekend should allow for good progress. The start to next week will be a wet one across the Corn Belt (excepting the Northern Plains), though the 6-10 & 8-14 day maps suggest a return to dryer weather thereafter. There are also myriad logistics issues that are interfering with corn movement, from low Mississippi water levels (that may be helped a little by the rains) to Mexican rail embargos. Export news has also been deafeningly quiet practically all month. Taiwan did tender for optional origin corn overnight, which will offer a nice check-up for U.S. competitiveness this autumn.<br> <br>There was plenty of livestock data to sift through after the close. Monthly Cattle on Feed arrived near trade expectations; “On Feed” inventory was 101% of year earlier, placements were at 99%, and marketings came in a little light at 96%. The separate milk production report was similarly unexciting, finding August milk production near unchanged relative to year earlier levels. Milk production data had been lagging prior year levels as HPAI infections at dairy farms can temporarily reduce cow productivity. End-user markets mostly had a good week. The major exception was ethanol, which continued the sharp sell-off that began at the start of the month. We think an average Midwest ethanol producer is making 10-15 c/gal net profits today, down sharply from 30+ c/gal at the end of August. Argentina’s corn was seen 7% planted, in-line with average.<br> <br>In the options, October serial month expired today without a lot of fuss. Over 1,000 Dec $4 Straddles traded late at 23 cents. Calendar spreads were mostly easier, particularly between marketing years. Corn was the ugliest house on the block, losing a little ground to both soy and wheat. Eyeing the charts, Dec Corn features important resistance in the $4.15-4.25 zone. The recent crop report confirmed initial support around $4, with more important levels below that at $3.85. Momentum indicators are trying to turn lower, and the RSI is just south of neutral. The weekly chart left a large gap with last week’s Sept contract expiration; trading below $3.94 CZ on a break would completely fill it.<br> <br>KJ </span></div></div>