Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: December corn closed lower for the fourth day in a row yesterday, although the downward momentum slowed. Traders said that support came from another stronger than expected Export Sales report with traders paying particular attention to cumulative sales to China. A hot outlook in the Midwest over the short term may have also provided some modest support along with recent excessive levels of moisture. Over the past week, the heaviest amounts of rain have fallen in SE Nebraska, central and northern Illinois and central Indiana, although moderate to somewhat heavy levels were also seen across most of Iowa, southern Wisconsin, northern Indiana and southern Michigan. Weather is expected to cool slightly in much of the Midwest starting Sunday and Monday and this may last through the end of the week. Some forecasters have added light to moderate rain on Sunday and Monday, but coverage is not expected to be general. Drier conditions are expected in the 6-10 day period and this is considered beneficial. Some forecasts call for a return to high temperatures after that, and this would be occurring into the pollination season in some key areas. Weekly export sales came in at 1,123,400 tonnes for the current marketing year and 332,300 for next year for a total of 1,455,700. Old crop sales need to average just 136,000 tonnes each week to reach the USDA forecast. The sales pace suggests upward revisions in exports for the upcoming USDA supply/demand report. This week’s corn sales included 230,000 tonnes sold to China for 2009/10 delivery and another 60,000 tonnes for 2010/11. Total sales to China thus far total 885,100 tonnes for 2009/10. Dry weather in NE China has been a focus of traders’ attention this week. A continued lack of rain in this key growing area would threaten China’s goal of producing 168 million tonnes of corn this year. Rain in southern China has caused some flooding, but it is not at the excessive levels seen in some areas of the central and western Midwest in recent weeks. The International Grains Council raised its 2010/11 world corn estimate by 2 million tonnes to 824 million tonnes. The IGC increased its usage estimate by 4 million tonnes due to the improved outlook for bio-fuels use. South Korea’s biggest feed maker bought 55,000 tonnes of corn overnight as expected.
TODAY’S GUIDANCE: Over the past 10 years, the USDA’s acreage number has increased by an average of 1.03 million acres between the March Planting Intentions report and the June report. If this is the case again this year, and if the national yield is near 165 bushels per acre, this factor alone would add more than 150 million bushels to the 2010/11 US corn supply. It is also worth noting that variations of just 1 bushel per acre in the US yield would add or subtract 81.8 million bushels from the US corn supply given the USDA’s current harvest acreage number. This equates to 2.078 million tonnes of corn. A change of just 1/2 bushel per acre in the US yield would bring a swing of more than 1 million tonnes which is more than China’s cumulative purchases from the US so far. First support in the December contract is near 355. First resistance is at 372 and then near 378 to 380.
TODAY’S MARKET IDEAS: Demand from China received a lot of attention yesterday, but this failed to support the market. It may take a combination of a weaker dollar and further sales to China to prevent a slide down near the early June lows at 353 3/4 in the December contract.
Corn Market Commentary – 2010.06.25
by Terry Roggensack on June 25, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: December corn closed lower for the fourth day in a row yesterday, although the downward momentum slowed. Traders said that support came from another stronger than expected Export Sales report with traders paying particular attention to cumulative sales to China. A hot outlook in the Midwest over the short term may have also provided some modest support along with recent excessive levels of moisture. Over the past week, the heaviest amounts of rain have fallen in SE Nebraska, central and northern Illinois and central Indiana, although moderate to somewhat heavy levels were also seen across most of Iowa, southern Wisconsin, northern Indiana and southern Michigan. Weather is expected to cool slightly in much of the Midwest starting Sunday and Monday and this may last through the end of the week. Some forecasters have added light to moderate rain on Sunday and Monday, but coverage is not expected to be general. Drier conditions are expected in the 6-10 day period and this is considered beneficial. Some forecasts call for a return to high temperatures after that, and this would be occurring into the pollination season in some key areas. Weekly export sales came in at 1,123,400 tonnes for the current marketing year and 332,300 for next year for a total of 1,455,700. Old crop sales need to average just 136,000 tonnes each week to reach the USDA forecast. The sales pace suggests upward revisions in exports for the upcoming USDA supply/demand report. This week’s corn sales included 230,000 tonnes sold to China for 2009/10 delivery and another 60,000 tonnes for 2010/11. Total sales to China thus far total 885,100 tonnes for 2009/10. Dry weather in NE China has been a focus of traders’ attention this week. A continued lack of rain in this key growing area would threaten China’s goal of producing 168 million tonnes of corn this year. Rain in southern China has caused some flooding, but it is not at the excessive levels seen in some areas of the central and western Midwest in recent weeks. The International Grains Council raised its 2010/11 world corn estimate by 2 million tonnes to 824 million tonnes. The IGC increased its usage estimate by 4 million tonnes due to the improved outlook for bio-fuels use. South Korea’s biggest feed maker bought 55,000 tonnes of corn overnight as expected.
TODAY’S GUIDANCE: Over the past 10 years, the USDA’s acreage number has increased by an average of 1.03 million acres between the March Planting Intentions report and the June report. If this is the case again this year, and if the national yield is near 165 bushels per acre, this factor alone would add more than 150 million bushels to the 2010/11 US corn supply. It is also worth noting that variations of just 1 bushel per acre in the US yield would add or subtract 81.8 million bushels from the US corn supply given the USDA’s current harvest acreage number. This equates to 2.078 million tonnes of corn. A change of just 1/2 bushel per acre in the US yield would bring a swing of more than 1 million tonnes which is more than China’s cumulative purchases from the US so far. First support in the December contract is near 355. First resistance is at 372 and then near 378 to 380.
TODAY’S MARKET IDEAS: Demand from China received a lot of attention yesterday, but this failed to support the market. It may take a combination of a weaker dollar and further sales to China to prevent a slide down near the early June lows at 353 3/4 in the December contract.
Tags: Corn, Grains
About Terry Roggensack