December corn is trading 1 cent higher near 7:30 am CST and there were no September corn deliveries overnight. Dalian corn traded lower overnight. The corn market traded a steady range overnight in light volume but rose from session lows after European markets opened. European markets extended gains from yesterday after the ECB announcement of their new bond-buying program. US stocks are set to open higher this morning and Gold is trading higher after seeing significant gains yesterday. The US Dollar is lower against the Euro overnight which is adding to the supportive tone this morning.
The corn market was dragged higher yesterday by an explosive move higher in the wheat market and the underlying support is prevalent in this morning's trade as well. Slight resistance to gains is being seen from a lower soybean market as traders take profits ahead of the weekend. The markets applauded yesterday's decision by the ECB and the broad-based support in the commodity sector due to the lower US dollar which has carried over today.
Spot basis bids for corn were steady to slightly lower for most markets yesterday, however the domestic basis rose by 17 cents per bushel at an ethanol plant in Linden, IN citing tight local supplies. Reports that farmers were delivering on existing contracts and selling spot bushels off the combine offered resistance to local basis gains. Gulf of Mexico basis continues to be weak as exports remain sluggish. Decatur, IL corn bids were down 6 cents per bushels at 28 cents over the December contract. Basis bids for Central Illinois the same time last year were close to 10 cents over the respective contract and the 3 year average is near 10 cents under.
US private exporters sold 217,424 tonnes of US corn to an unknown destination for shipment periods of 2012/13 and 2013/14. A major South Korean feed group bought 65,000 tonnes of US and South American corn overnight and a separate feed maker in South Korea bought 134,000 tonnes of South American corn. Argentina could have a record corn harvest this year with estimates near 24.5 million tonnes in 2012/13. The weekly exports sales report will be released this morning and the market estimates sales near 275,000 tonnes.
Cumulative corn used for ethanol production for the week ending August 31st, for this crop year is 4.96 billion bushels which falls just short of the 2011/12 USDA estimate of 5 billion bushels. This means the USDA will increase 2012/13 beginning stocks by close to 40 million bushels. Corn used per week was 88.30 million bushels which if averaged across 52 weeks means 4.591 billion bushels used in 2012/13 season vs. the current USDA estimate of 4.500. The August average for corn usage per week comes in slightly lower at 87.50 million bushels which implies 4.550 billion bushels used in 2012/13 or 50 million more than the current USDA estimate.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.