December corn is trading 5 cents higher near 7:30 am CST following yesterday's two sided trade. The corn market opened steady to slightly better overnight in low volume. Dalian corn was slightly higher overnight. European markets traded lower with Asia overnight and investors fear the economic contraction in the Euro Zone will continue until further action from the ECB. German Bonds hit a 6 week low overnight as traders fled riskier asset. The US Dollar is trading slightly higher, crude is nearly unchanged, and US Stocks are set to open marginally lower. December corn continues to consolidate just under $800 with very little news for bulls to take advantage over. End user and speculative buying was found near the low end of the range we have traded since the beginning of June. The wheat outlook is almost a non-issue at the moment. While the cooler 2 week outlook will provide stability to corn crops, the yield damage remains and is irreversible at this point. This likely means crop conditions ratings for the remainder of August will become less important while maturity and harvest progress should receive more attention. Volatility has plummeted this week along with volume. Globex volume yesterday was reported at 173,269 with decreases of 7,720 in open interest. Corn saw a huge jump in open interest following the release of the USDA report last Friday so the lower trade this week has likely forced some of the late longs out of the market the last two days. The corn market is looking for direction and since weather is no longer the driving force, demand will need to play a bigger part in deciding where the market goes from here. Cash markets remains weak on the front end which is weighing on nearby corn calendar spread. Nearby cash barge values dropped again yesterday as new crop bushels come to the market place and storage space is becoming an issue in the Gulf of Mexico since exports are slow. Pressure is also being seen due to wheat feeding becoming more prevalent in the eastern and western Corn Belt but the bulk of the domestic feed wheat business may not be done until the 1st quarter of 2013 once corn harvest is out of the way. Cash corn at the Gulf of Mexico export channels has fallen to a 2 year low. November and December cash markets are trading at a heavy premium to nearby values after traders are having a difficult time sourcing bushels. Four states have now asked for an Ethanol Mandate waiver. The states include North Carolina, Arkansas, Delaware, and Maryland. The EPA continues to leave the issue up for argument and has not released any further comments on if action will be taken. With elections in November and candidates campaigning in Iowa at the moment, it is unlikely that any drastic measures will take place immediately. Iowa margins were lower last week but have likely seen a bounce into positive territory this week with corn futures trending lower, DDG's trading well over $300 per ton, and September Ethanol futures trading back over $2.60.
Join the Discussion