July corn was trading near 1 1/2 cents higher and December up 7 into 7:30 AM central time. Outside market forces look slightly negative with lower trade for US stock market, weakness in energy markets and a higher trade for the US dollar. The weather outlook for early this week looks more threatening than late last week as the Midwest looks much hotter than expected and mostly dry over the next 10 days. Some dry areas of northern and central Illinois and Indiana received hefty rain totals over the weekend but some areas of Indiana and Ohio were left dry. Stress will quickly return to many areas of the Midwest if upper 90's are seen for the next three days as moisture needs are very high. Traders see a 2-3% decline in crop conditions for tonight's update. Rumors of Brazil corn imports into North Carolina and talk that ethanol plants may sell corn into the cash market helped to spark the steep sell-off on Friday. This may have left the market oversold. July corn closed sharply lower Friday. Weather uncertainties, Greek uncertainties and talk of collapsing ethanol plant margins plus indications of cooler weather on the extended forecast models were all factors which helped to pressure the market. The surging cash basis levels have sparked talk that ethanol plants may just slow or stop production and sell the corn onto the cash market. Cash basis was firm again Friday so it does not appear that this has occurred yet but the talk helped to pressure the July. A prominent research firm revised their corn planted acreage estimate up to 96.8 million acres as compared with 95.9 million by the USDA. Traders have been expecting a slight increase so the news was seen as a negative factor. With normal yield, this could add near 144 million bushels to the supply. The Commitments of Traders reports as of June 12th showed Non-Commercial traders were net long 93,568 contracts, an increase of 3,552 contracts for the week. Trend-following fund traders (non-commercial less index funds) reduced their net short position by 3,406 contracts to 2,976. This group was net long near 200,000 contracts earlier this year. Non-Commercial and Nonreportable combined traders held a net short position of 28,894 contracts. South Korea bought 55,000 tonnes of optional origin corn on the weekend. On top of the US weather, China northern plain areas hit a high of 102 degrees over the weekend with some dry weather for early this week. Most areas in China have been too wet but this key growing area may be seeing stressful conditions ahead.
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