Afternoon Corn: Export sales in the morning telegraphed to be impressive
<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 kept the bull fires burning today, tacking on an extra 2-3 cents in old crop (while new crop months held close to the flat line). The market has now recovered twenty cents off last Thursday’s low. Funds likely covered a few more shorts today, potentially leaving them with less than 70,000 net shorts in the market. Cash corn trade was steady/mixed.<br> <br>Like yesterday, there was not a lot of grain news around. There was a small 8 AM flash to keep that streak alive; unknown bought another 100,000 metric tons of U.S. corn. Since the start of October, we reckon Mexico has purchased 2.5 million metric tons of U.S. corn, and ‘unknown’ bought a total of 1.9 million. There was a marked acceleration in activity when CZ broke back to $4, which sets up what should be a ‘blow-out’ number in tomorrow’s weekly sales report. It would not surprise us if new corn sales meet or exceed 3 million metric tons for the week. Beyond 8 AM announcements, export news has turned quiet again.<br> <br>The report-du-jour was the weekly EIA, and it held mixed feature for ethanol. Ethanol production jumped nearly +4% higher on the week; the resulting 1.081 mil bbl/day rate would utilize 5.70 billion bushels of corn over a marketing year. Blender demand up-ticked fractionally as expected, but exports slowed a notch. Despite the sharper-than-expected rise in production, ethanol stocks declined -0.2% to 22.22 million barrels (933 million gallons). We think industry profitability remains around 5 c/gal, net of all costs, well below the ~30 c/gal average enjoyed most of the spring/summer.<br> <br>Elsewhere, end-user markets were mixed today; hogs better, milk steady/better, and cattle easier. The latter may have reacted slightly to the McDonald’s E. Coli story? Weekly USDA reporting found broiler egg sets up 8% yr/yr, with chicks placed up 6%. Despite the large yr/yr comps, current broiler production is hewing close to recent averages? U.S. harvest continues to roll and is likely on the final one-third, and southern hemisphere first season planting is ongoing. South American weather looks pretty good for most at present.<br> <br>In the options, vol was a touch easier. Calendar spreads eased back a little up-front but continued to firm between marketing years. Corn was fairly even on the beans but gained a little on the wheat. Eyeing the charts, Dec Corn held $4.00 chart support last week, which remains operative. We see the corn market into minor resistance levels now. Momentum indicators have turned up on the daily (and remain up on the weekly). The RSI has fully worked off its oversold condition but is not yet excessively overbought, sitting in the high 50’s.<br> <br>KJ </span></div></div>