Corn Morning Update & Commentary: Overnight, the markets were defensive; futures finished 14-15 cents lower by the morning pause. Much of the weakness appears to be centered around model runs that suggest the current 'warm/dry' trend in the U.S. will moderate as we head into August....

Corn Morning Update & Commentary:  Overnight, the markets were defensive; futures finished 14-15 cents lower by the morning pause.  Much of the weakness appears to be centered around model runs that suggest the current 'warm/dry' trend in the U.S. will moderate as we head into August?  One thing for sure is the world weather picture is not lacking for excitement.  Continued frost/freezes in Brazil have sent the coffee market ripping higher (up 20% in about one week), Henan province in China received another 40 inches of rain, and Western Europe is dealing with their own excess rain issues (while Black Sea dries down).  Henan province does grow roughly 9% of the country's corn crop, though much of the initial damage was relegated mostly to the urban areas?  Stay tuned?  The weekly export sales report will not improve anyone's mood; total net sales were negative.  Old crop saw a reduction of -88,500 metric tons, owing mostly to the cancellation of 160,000 metric tons in China sales.  New crop sales were just +47,700 metric tons.  Expectations were low, but not that low!  Still, the market likely has bigger fish to fry, and in the end, new crop sales are still in very good shape at 16.1 mmt.  Outside markets are relatively quiet to start.  August grain options expire tomorrow (Friday).

Wednesday was a quietly mixed day at the CBOT. Futures would finish the day a couple cents better in new crop positions; Dec '22 and Sept '21 would both finish unchanged or near enough. Managed Money traders likely bought a contract or two today; we estimate they are net long about 165,000 corn futures and options. Cash markets were steady/mixed, leaning better. After a two week pause, the EIA returned to their bearish ethanol reporting ways. The big ugly was ethanol inventory, which saw a truly large wk/wk build of +6.5% to 946 million gallons. That is the highest level of stocks seen since February of this year; ugly "catch-up" build? Ethanol production fell -1.3% that week; over the course of a marketing year, the resulting 1.028 mil bbl/day rate would consume 5.45 billion bushels of corn. To little surprise, the ethanol market focused more on the stocks build than the production dip; futures finished 1-3 cents lower on the day. Ethanol producer margins are turning a deeper shade of red now; we think most are losing at least 5 c/gal in the spot, including all costs. Weekly broiler hatchery data after the close found egg sets up 2% yr/yr, while broilers placed were down 2%. Both have been trending lower relative to early summer levels?


QT News - Top News
**USDA Corn 20/21 Export Sales Net (07/15): -88,400 mt; 21/22 Net: 47,700 mt; expected 50k-700k mt
**USDA Sorghum (Total) 20/21 Export Sales Net (7/15): -52,200 mt; 21/22 Export Sales Net: NONE mt

-- On Thursday, Ukraine stats bureau data released shows as of July 1st, the country's grain stockpiles at 5.4 mln mt, that is lower than the 5.54 mln mt on the year ago date.
-- On Thursday, Ukraine Black Sea port officials say four largest ports have restricted grain loading operations on poor weather concerns.
-- On Thursday, German shipping officials say southern Rhine River remains closed to vessel traffic, but noted water levels have continued to fall for the second day.
-- Tens of thousands of Indian farmers has staged sit-in strike around parliament, they claim the newest farming laws have threatened their livelihood and are seeking to have them rolled back
-- On Thursday, China's Commerce Ministry spokesperson said they expect last half 2021 foreign trade growth to slow compared to year ago levels. The ministry said increasing raw material prices and issues with shipping logistics will tighten trading company margins.
-- Ahead of Friday's cattle on feed report, analysts are expecting as of July 1 on feed at 99.0% of the year earlier level. Placements are projected in June at 96% of the year ago level, marketings in June are expected at 102% of last year's levels. The report will be released at 2:00 pm CT Friday.

Pending Tenders
-- Pending Tender: Grain trade sources Monday said Jordan's state grain buyer set July 28th as offer deadline in a tender seeking 120,000 mt of feed grade Barley. The grain is for shipment between Nov 1 through Dec 31.

-- Euronext Paris November corn futures on Thursday are trading -2.25 euros lower at 204.50 euros/mt
-- Dalian September corn futures on Thursday traded -5 yuan lower ending at 2,520 yuan/mt
-- Outside markets. Crude Oil +68c ; Gold -$7.30 ; Silver -15.5c ; US $ index +2 pts

KJ