Corn Morning Update & Commentary: Overnight, the corn market traded with firmer feature, leaving yesterday's close to finish 3-plus cents higher by the AM break. Markets have come a long way in a very short period of time, effectively undoing.....
Corn Morning Update & Commentary: Overnight, the corn market traded with firmer feature, leaving yesterday's close to finish 3-plus cents higher by the AM break. Markets have come a long way in a very short period of time, effectively undoing the entire summer rally in a month's worth of trade. Selling of course accelerated after Monday's USDA report with corn falling more than fifty cents in three days. May be time to come up for air, though there is nothing particularly stimulating in the news so far this morning. Weekly export sales continue on their "new normal" trajectory; old crop sales were a paltry 56,100 metric tons, while new crop was a slightly more respectable 307,600. We were looking for something just under 500k combined, so close enough! China rolled an old crop cargo to new crop? Just over three weeks remain in the 18/19 marketing year, and total sold + shipped is barely on track to hit 50 mmt, assuming we ship everything sold. Need over 53 mmt to meet USDA sales forecasts. 4.38 mmt of new crop corn is on the export rolls, which is well behind last year, but is very close to levels seen two years ago, so not horrible. Analysts in EU and Ukraine slightly raised feed grain (corn and barley) crop estimates? Argentina thinks farmers will expand corn acres 7% next year. U.S. weather has been a little bearish this week, though we note the latest runs have shifted rains further south, potentially missing some key Iowa crop land? Eastern Belt still dry and could use a good drink yet??
The corn market kept the pressure on the bull Wed, ultimately finishing 6-7 cents lower. The only difference between that and the prior day was the participation of 19/20 crop futures in the selling. Managed Money traders were estimated net sellers of 25,000 corn, expanding their first "net short" position in corn since early spring. Cash trade was steady/weak at the Gulf; it was mostly steady on the interior, though some eastern processors were trying to wheedle bids lower. The weekly EIA report held mostly bear feature, with production up-ticking slightly (+0.5%) and stocks posting an unexpectedly large build. Current run rates continue to imply a 5.45-5.50 billion bushel a year type of grind, which is close to USDA estimates. One positive point was blender demand, which jumped to a record high. Somehow, ethanol inventories still managed to build +3.3% wk/wk. Ethanol futures responded by trading to lows not seen since this winter. The recent break in corn has been mostly mirrored by a similar decline in ethanol, implying no relief for plants struggling with negative margins. Some plants are entering their second year of negative profitability? Livestock finally managed to pull themselves off the mat Wed, with both hogs and deferred fat cattle finishing about $2 higher. Financial markets were hulk-smashed by recession fears, which also likely did not help the grains much intraday.
QT News - Top News
**USDA Corn 18/19 Export Sales Net (08/08): 56,200 mt; 19/20 Net: 307,600 mt; expected 200k-650k mt
-- China's Nat'l Grain Trade Center Thursday sold 518,385 mt of Corn from state reserves, that was 13.1% of the total volume offered into the marketplace. Today's average selling price was 1,684 yuan/mt.
-- Good weather conditions have prompte APK-Inform analysts to increase their overall 2019 Ukraine grain harvest forecast to 72.5 mln mt up +700,000 mt over the previous outlook. The group also raised their July 2019-June 2020 grain export forecast to 50.7 mln mt up +800,000 mt over the previous.
-- Analysts with Strategie Grains boosted their 2019/20 EU corn crop production forecast to 63.2 mln mtup +500,000 mt over their estimate last month. The 2019/20 Barley production estimate was also raised to 60.5 mln mt compared to last month's forecast at 59.3 mln mt.
-- Argentina presidential contender Fernandez Wednesday described talks with President Macri as good, adding that both want markets to stabilize. Fernandez further said his political policies do not include defaulting on the country's debt.
-- Rosario commodity exchange Wednesday forecast the Argentine 2019/20 Corn crop acres at 7.4 mln hectares, that is 7% higher than last season. The exchange forecast Argentine Corn production at 51.0 mln mt.
-- On Thursday, China's customs agency banned Myanmar pig imports and related product imports due to African swine fever concerns.
-- Pending Tender: On Wednesday, Japan's Ag Ministry announced they are seeking 200,000 mt of feed barley and 120,000 mt of feed wheat at their weekly SBS tender to close on August 21st. The grain is for arrival by end of January 2020.
-- Euronext Paris November corn futures Thursday are trading +0.25 euro higher at 168.75 euros/mt
-- Dalian January corn futures Thursday traded +4 yuan higher ending at 1,915 yuan/mt
-- Outside markets. Crude Oil off -73c @ $54.50; Gold off -$3.10 @ $1524.60; Silver off -10c @ $17.180; US $ index off -9 pts @ 97.73
QT News Cash Markets
Bean Barge Corn Barge SRW Barge HRW Track Ill Riv Frt
12 pro 11 pro
Aug +36/40 X +33/43 U +65/73 U +163/173 U +125/135 N 525/575
Sep +26/30 X +32/35 U +75/84 U +163/170 U +125/132 N 400/425
Oct +25/29 X +35/38 Z +75/85 Z +155/162 Z +125/132 U 435/450
Hi-pro meal Soy oil
Chicago -20 X +25 U +15 U
Toledo -20 X +40 U +25 U
Dec ILL -18 X +28U -17 U +50 U