Evening Corn: CFTC likely to show a new record fund short tomorrow

Evening Corn:  CFTC likely to show a new record fund short tomorrow

The corn market was mixed Thursday in quiet trade in front of a long weekend. Futures trended lower most of the day, but a little late short-covering helped "old crop" contracts to fractionally higher closes, while new crop Dec finished a half cent lower. Volume decreased every day this week, and today was no exception? Futures lost two cents this short week. Managed Money traders were viewed small net buyers today and will head into the weekend net short an estimated 305,000 combined futures and options. CFTC data will be out tomorrow to update, despite the markets being closed that day. Cash trade was quiet heading into the weekend; a few interior locations were bid, while Gulf trade was mixed.

The weekly export sales report this morning was favorable within the context of subdued expectations. New 18/19 corn sales of 947,600 metric tons were about 100k better than we expected. Japan, Mexico, and Colombia, were the largest buyers of record. Total corn sold + shipped for the current year stands at 44.7 mmt, which compares to 49.3 mmt on the books this time last year. Exporters have 20 more weeks to book enough sales to meet the USDA's export target of 58.4 mmt. Not impossible, but very difficult given aggressive South American competitors, who are armed with a much cheaper currency.

Farmer gripes about "too wet" continue in all but the SW quadrant of the Corn Belt, but the market appears content to wait and see if a dryer outlook in late April and early May survives the next set of forecast runs. Planting progress Monday will feature efforts in states such as Missouri and Kansas, but we see the national figure falling well short of the typical 14% average. South American crop estimates continue to slowly inch higher, too, adding to negative sentiment. Argy gov't confirmed an overall feed grain crop (ie: both corn for grain and silage) +11 mmt larger than last year's drought-shortened harvest. EU and FSU drying out a little, which will help them get spring crops planted.

Elsewhere, livestock markets were a little firmer up-front in a fairly subdued session of trade. Cattle on Feed after the close found larger cattle numbers, which will probably be a little bearish for Fat Cattle come Monday. "On Feed" seen at 102% (market looking for 101%), while placements came in at a whopping 105% (market looking for 104%, with a few expecting steady/lower?). Dairy and ethanol were both flat. Both industries will go into the weekend in a "breakeven to slightly better" margin posture. Markets are closed tonight and Friday, and will reopen Sunday (Easter) night. Nothing new on the "Trade War" front today, with a host of bilateral agreements (China, EU, Japan, etc) still up in the air. The U.S. won a WTO ruling against China's restrictions on ag imports (TRQ's).

In the options pit, corn volatility was a little softer. Very quiet day overall after yesterday's encouraging action. Players sold 200 july 370 straddles at 22 cents. Another house paid 15 cents for 500 Dec $3.70 Puts. Calendar spreads were firmer between crop years. Corn was not much changed on the beans today, but gained on most wheat futures. May Oats had a tough day, quickly sliding away from a brief test of $3? Technically, May Corn has established the $3.55 area as significant support and the spot to beat to generate more bear momentum. Initial resistance stands just below $3.70, which we have not come anywhere close to in nearly two weeks. Weekly indicators lean negative, while the daily charts are trying to turn back lower, but not doing a great job of defining a trend. Choppy!