Corn Weekly Comments Sept. 15

Corn Weekly Comments Sept. 15

To start the week corn opened the overnight session lower but managed to firm to trade steady towards the end of the session. Early selling was tied to improving weather forecasts and thoughts that corn is past the point of seeing too much production variance from weather. Corn proceeded to trade in a sloppy fashion during the day session with pressure spilling over from a lower wheat complex while support came from soybeans. It appears that corn is marking time waiting for USDA’s Sept Crop Production report to be released. The report is expected to show a reduction in yield but in reality, it will come down to how the report comes out for soybeans as corn’s price can’t get too far from soybeans.

On Tuesday corn opened the overnight session lower but managed to trade with only minor losses throughout the night session. Last minute position squaring ahead of today’s USDA report was evident. Light support came from Monday afternoon’s Crop Progress report, which showed another week of lower crop ratings. Corn faded lower once USDA’s report was released and extended session losses once the soybean complex extended its losses.

USDA’s report was neutral to negative corn. For old crop corn USDA made the following adjustments: increased imports 5 MB, decreased ethanol 30 MB, and increased exports 40 MB. The net result was a 5 MB decrease in stocks, putting them at 1.45 BB, 6 MB below expectations.

For new crop, USDA increased planted acreage 772,000, increased harvested acreage 774,000 vs expectation of 678,000. Yield declined 1.3 bus to 173.8 bus, .4 bus above expectations. That put production at 15.13 BB, 148 MB above expectations and 23 MB above last month. The net result was an increase in ending stocks of 19 MB putting stocks at 2.22 BB 87 MB above expectations.

Old crop world ending stocks were estimated at 299.5 MMT, 2 MMT above expectations and 1.6 MMT above last month. New crop ending stocks were estimated at 314.0 MMT, 4.3 MMT above expectations and 2.9 MMT above last month.

In Wednesday’s session corn opened the overnight session steady but managed to push higher by the time the night session was coming to a close. Corn turned to trade mixed once the day session started due to additional pressure from Tuesday’s negative report. Corn’s biggest issue with the report was the increase in acreage, as traders were only expecting a slight increase in acreage. What was interesting was where the acreage increase was, mostly in the drier western Corn Belt, which helped to support corn today as many traders are expecting harvested acreage to decrease. Harvest pressure added selling pressure as the next 5 days are expected to be dry, which should help push harvest activity. Forecasts calling for above normal temps and rain in the 6 to 10 day and 11 to 15 day forecast supported corn late in the session. Late session support also spilled over from the higher wheat complex.
Last week’s ethanol production estimate came in at 1.039 million barrels, up 27,000 barrels from the previous week. Stocks were estimated at 21.17 million, down 450,000 barrels, from the previous week and an 89-week low. Gas demand plummeted to now be below the 5-year average.

On Thursday corn opened the overnight session lower but managed to trade with minor changes by the end of the night session. Selling pressure returned once the day session started due to spill over pressure from the lower wheat complex. Light selling was also tied to the realization that corn stocks are going to remain burdensome all year and that any rally in corn will be limited. Losses were kept in check by a stronger soybean complex as traders are really trying to not let the spread between corn and soybeans get out of line. Today’s Drought Monitor map estimated 54% of the nation’s corn in is some state of drought, up 5% from last week. Reports that EU members have approved a law requiring 70% of the jet fuel used at EU airports by 2050 be sustainable fuel that cannot include palm or soy oil added some support as ethanol fits into this category.

Dec corn support is at $4.65 while resistance is at $5.25.

For the week, Dec corn was at $4.7625 down 7.5 cents. Mar corn was at $4.905 down 7.5 cents.