Afternoon Corn: Turnaround Tuesday
<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>Turnaround Tuesday?!? A slightly better night session gave way to a slightly lower day session. Corn would settle the day 1-2 cents lower, near the midpoint of a five cent intraday range. Funds may have sold a few odd lots but are believed net long roughly 160,000 delta-adjusted contracts. Cash corn trade was steady after digesting a recent slide amid a wave of farm selling.<br> <br>There was a little more to chew on today, but overall the market feels like it is trying to coast to the holidays with minimal drama. Mexico broke the 8 AM corn flash sale drought, picking up 170,400 metric tons (mt) of U.S. #2 yellow. Korea’s FLC also picked up a cargo of corn overnight, though we strongly suspect it was not U.S. origin. Not enough to get the heart racing for sure, but it is good to see a little flow after a quiet first half of December.<br> <br>The report-du-jour tomorrow is the weekly EIA. We think ethanol production will pick up a little more steam, likely rising about +1-2% wk/wk. Blender demand should also prove a little better, while exports hold around steady at recent elevated norms. We think the uptick in production will flow directly into an ethanol stocks build of around +1-2%. Ethanol futures were steady/easier today, which should maintain a crush environment indicative of small losses for an average Midwest plant (net of all costs).<br> <br>Elsewhere, other end-user markets were quietly mixed. Meat/milk markets are bracing for a plethora of data due to come out later this week (and early next): milk production is due Thursday, Cattle on Feed is out Friday, and Quarterly Hogs and Pigs will be released Monday. There has been a sudden upswing in bird flu cases in flocks across the Midwest? The big macro leaned a little negative today; the Fed (FOMC) is due to rule on interest rates tomorrow (smart money says quarter point cut). Congress is trying to pass another stopgap funding bill with a weekend deadline looming. Early text suggests corn ethanol will get a modest win by codifying year-round E-15 blends? Farmers will get a $10 billion earmark but no farm bill? South American crop potential remains high, though it appears increasingly likely Argentina may endure some dryer weather ahead. Most prognosticators are still penciling in ~50 mmt Argy corn production plus 120+ mmt full year Brazil corn, though we will note the larger Brazil safrinha crop is still a gleam in the farmers eye and will not be planted for several months.<br> <br>In the options, volatility held about steady. Calendar spreads were also little changed. Corn gained on both beans and wheat for a second day. Eyeing the charts, post-report trade confirmed meaningful resistance at $4.50 in March Corn. We see support starting at $4.40, then every nickel lower from there. March Corn has worked off its overbought condition with the RSI back down to the high 50’s. The weekly chart is still in a positive mode; it received a small boost to start this week due to CZ contract expiration.<br> <br>KJ </span></div></div>