** US corn in good shape coming out of pollination. First “real” USDA yield estimate at 175.1 bpa. ** Brazil second crop harvest near complete. Exports cancelled on record high domestic prices. ** World corn carryout seen near a record high, but significant dislocations noted. ** Ethanol margins 10-15 c/gal positive. Hogs losing ground. Feedlots/Dairy back in the black. ** US Corn should see active exports through the summer. Black Sea & US competing for O-N-D. ** Funds leaning about 125,000 contracts net short corn.
Overnight, corn was weaker, likely reflecting the unexpected improvement in crop conditions Mon afternoon, and finished 3 cents lower by the AM break. Though in truth the report is a waning influence at best at this late juncture of the growing season, the USDA posted a contra-seasonal +1% Good- Excellent uptick in corn ratings. At 75% G-E, ratings remain safely ahead of last year’s 69%. Crop is roughly a week ahead of normal with 85% in dough stage and 40% dented. 6-10 & 8-14 day maps have shifted from a cooler bias in last week’s runs to the same “warm and wet” pattern seen through much of the summer. Looks like pretty good finishing weather for the crop, though it likely won’t improve yields for most spots given the advanced maturity? Annual ProFarmer Crop Tour generated the usual buzz, though much like the crop progress report, the importance can be questioned. They pegged Ohio yields at 148.9 bpa vs. 148.3 bpa last year on the tour and the USDA estimate this year at 163 bpa (vs. 153 last year). South Dakota was estimated at 149.7 bpa vs. 165.9 bpa on last year’s tour and the current USDA at 147 (vs. 159 last year). As for the latter, yields tended to improve as they rumbled into Nebraska? Stats Canada this morning offered no surprises on the feed grain side; corn pegged at 12.35 mmt vs. 12.4 mmt, though this is down over 1 mmt from last year.
The post-report spike low should offer the corn market some stability. The only question now becomes just how much we can rally, and we would still lean toward major resistance in the $3.50 area, basis CZ, though we look for a battle every nickel higher starting already at $3.40 CZ. Today feels ripe for a “Turnaround Tuesday” rally; consider picking up some cheap calls on the early dip. Monday, players traded Dec $3.50-$3.80 1x2 Call Spreads for 2 ½ cents, which is fairly inexpensive.
Quietly lower start to the week in the corn market, finishing a penny lower by Monday’s end. Volume was extremely light, barely topping 200,000 contracts, including spreads. Funds were estimated net sellers of about 5,000 contracts, which, if CFTC data is to be believed, would put them net short over 120,000 contracts. CIF bids are firm to start Tuesday, while the interior is more mixed. Grain Inspections Mon were surprisingly robust given flood disruptions over the reporting week. Exporters shipped 1.25 million metric tons of corn for the week ended Aug 18th, or almost 50 mil bu, which was more than the 1.0-1.1 mmt the market was expecting. This takes the YTD export tally to 44.1 mmt vs. 43.7 mmt this time last year, with two weeks left in the 15/16 marketing year. Roughly half of the week’s shipments came out of the Gulf, and the other half out of the PNW. Latin & Asian interest continues to show for US corn. Some talk of a little demand out of North Africa, too? Ethanol held itself together to start the week, effectively holding onto last week’s gains in the crush. We see cash margin at a three week high of roughly 35-45 cents/bu, including all costs, or <15 c/gal. USDA estimated Texas corn at 47% harvested, close to normal, while Louisiana was 35% harvested vs. 65% normal.
Pro farmer tour started today in So Dak and the far western Corn Belt and in the far eastern Corn Belt in Ohio. Plan is to meet in the center of the Corn Belt late in the week. This means a lot of lower yields to start and better yields to end the tour? The Ohio side of the tour found yields in southern and central Ohio acres not far from normal with 150 to 206 bpa. But things deteriorated in the NW Ohio with corn yields much more variable at 75 to 150 bpa. The western leg found some real issues on So Dak that magically got better across the southern border into Neb. So Dak at 125 to 150 bpa but irrigated corn in Neb showed 200 to 235 BPA on irrigated ground with 120 to 150 bpa on non-irrigated. More to come tomorrow.
Informa over the weekend added 1.0 mil acres to 95.1 mil acres of corn ground based on FSA data released the previous week. They added only 322 thou acres to the bean area to 84 mil acres. This is backwards from what the Linn estimates show. Linn bean acres have been 800 thou over the USDA since spring at 84.7 mil. With the new FSA data, would not be surprised to see this move to higher at 84.9 mil. Linn had assumed the USDA corn acres at 94.1 mil, but would not be surprised to see this go up 400 to 94.5 mil.
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