The corn market closed up about 3-4 cents on Friday as it took out last weeks highs earlier in the session, but just couldn’t finish strong. After all the volatility for the week, corn closed down a ¼ cent for the week. The corn market was stronger from the beginning on Friday morning, as traders were buying on concerns about low yields and strong export demand. The corn market did find some selling at the end of the day as traders looked at an over bought market, the weekend, and good profits if you bought the break earlier in the week. The market is starting to hear about disappointing yields across southern IL and when you combine that with the strong export market, it is raising concerns that we won’t have enough corn to go around. The early harvest results are disappointing in the fringe states, so some are waiting as harvest moves north. There was more export sales announced on Friday before the opening to unknown destinations which raises the question if the USDA will have to greatly increase the their export estimates. Some traders feel that exporters are booking US corn to protect themselves against problems in Russia and may cancel these sales later on this year if there is enough feed wheat available. The volume remains good at 309,000 contracts and funds were buyers of about 10,000+ contracts.
Overnight, the corn market closed up about 6-7 cents which was near the highs of the day which was made earlier last night. The story of the day right now is disappointing yields from IL which traders are saying could pull down the national average because there just aren’t enough big yield areas in IA, NE, and MN. With the weather this summer and much of the corn crop getting planted early, we will see an early harvest this year, so we will know get a much better idea on yields and production this year. The demand remains excellent as we continue to see good export sales, but the problem may become capacity as the pipelines are full and basis levels are getting wider which is trying to stop the farmer from selling. The corn market is into 7 month highs and it seems to want to go test the January highs of $4.50 and then see if it can close above that level. The corn market will be called about 5-7 higher inline with the closes this morning. It will be interesting to see if corn can hold the early gains, especially with the crop condition report coming out this afternoon after the close. The market is expecting a decrease in good to excellent by 1-2%.
Globex Overnight Contract Last Net Change High Low Volume ZCU10 426^6 5^6 429^0 422^6 9376 ZCZ10 442^4 6^4 444^6 438^0 25761 ZCH11 455^4 6^2 458^0 451^2 6551 ZCK11 461^0 4^6 464^0 457^4 683
Early Opening Calls: 4-6 cents better
Top News -- 2010 Corn crop in Romania is seen at 8 mln mt, just slightly ahead of last year's, while sunseed crop is seen at 1.5 mln mt this season, up 36% over last year's -- Economics ministry in Russia sees grain harvest in a range between 62 to 63 mln mt, that's inside a larger range of 60-65 mln mt some private analysts are expecting -- Domestic grain analyst in the Ukraine said the first 20 days worth of grain exports were 445,270 mt that compares to July's 524,500 mt -- Official with gov't of Tunisia suggests the country will import about 2.0 mln mt of grain next year to make up the difference with this year's lower harvest of 1.1 mln mt of grain -- Tate & Lyle repays $1.4 million in incentive money to the state of Iowa after indefinitely putting on holds plans to build a 100 mil gal/yr plant in Fort Dodge, IA -- The state of Mississippi and Texas-based KiOR have reportedly agreed to terms to build up to three next gen biofuel plants in Mississippi, with a total potential investment of $500 million -- Brazil ethanol production is expected at 6.9 billion gallons, down 3.7% from UNICA's April estimates, but up 11.4% from last year -- JBS company spokesperson suggested the company is looking whether to sell off some of its beef production plants, saying export restrictions and declining cattle stocks are reasons it is looking to pull back -- Pending Tender: Traders say in the week of Aug 30 to Sep 3 they expect S Korea's MFG to issue a tender for 40-60,000 mt of Corn. Shipment of the grain is reportedly for the Nov-Dec period -- Pending Tender: Japan announced it is looking to purchase 20,000 mt of food grade Barley in a SBS tender to close on Sept 3rd. The cargos must be shipped by Nov 30th -- Pending Tender: Merchandisers in the EU say Jordan's state run grain buyer is seeking 50,000 mt of feed grade Barely in an August 24 tender deadline. Delivery is for FH Sep or FH Oct -- Dalian May Corn futures were up +18 @ 2,038 yuan/mt. -- Liffe Nov. Corn futures were up +4.00 @ 196.25 euros/mt., Jan. was up +4.25 @ 197.00 euros/mt. -- Globex Corn Vol: 273,716; Pit Vol: 24,344; Open Interest change: - 24,822 -- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Above Precip. -- Outside markets: Energy Complex -0.44 at $76.73; Gold & Silver: -0.9 at $1237.0 & +0.011 at $19.085; US $ +0.017 at $82.985
Cash Markets -- CIF Corn steady off 2. Aug. +36 to +40, Sept. +42 to +45, LH Sept. +51 to +57, Oct. +47 to +52, Nov. +56 to +57, Dec. +55 to +57, Jan. +49 to +52
TREND:
Sept contracts are deliverable on the close on Monday.
Bothered by the fact that the corn market has developed too many bulls and the wheat market has gained too many bears---lot of company in our trade ideas so it will be a rocky road if in fact it unfolds as predicted here? We will remain an active seller of 15 to 20 cent rallies in wheat taking profits when given a good opportunity. Same in corn ---buy 12 to 15 cent breaks and take profits when given opportunities. There could be several of these opportunities over coming weeks. The Friday trade into new highs without a blow up trade takes away that fear.
New highs on Dec corn but the weekly was not able to take out the highs made earlier this month. The most positive thing is that corn held where it should have on weakness this week. The upside count for CZ 4.60. Market still has a demand driven type of trade with pretty dependable setbacks. Acted a little tired on Fri even with a new high close. Buy CZ on a 20 cent break if this all takes place in the next 10 to 15 days.
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