The corn market closed higher on Thursday on the back of the other grain markets and out side markets. Chicago wheat closed almost limit up after trading up there the 2nd half of the session and beans closed over 15 cents higher. Outside markets, specifically metals and energies, traded much higher today and helped support the corn market. A lower US$ also helped to support the corn market as a cheaper dollar makes exports more attractive. There was very little new news out today on the corn market, so it was mostly following the other markets. The story of the commodity markets is to buy and without any new news, the grains are following that pattern. Volume was light/moderate and funds were net buyers of 5,000+ contracts. Traders also pointed to speculative technical buying helping to support corn as corn traded through key resistance we haven't seen since September.
eCBOT market was lower overnight as we saw the outside market breakdown and the grains followed. So. Korea was tendered for 100,000 non-GMO corn for Feb delivery and we will wait to see if that comes from the US or China. If it comes from the US, it is another sign that China does not have corn to export. Taiwan to tender for up to 29,000 tones of US corn. The USDA weekly crop progress report shows corn harvest 73% complete vs. 60% last week vs. 65% last year vs. the 5yr average of 69%. Delays in Iowa and So. Dakota could become an issue if rain were forecast for those areas, but it looks like they will make huge progress this week and it is estimated that harvest corn should be close to 90% by next week. The bottom line in corn is there is no news to the move the market, so the corn market will look to other markets for direction. With wheat down over 15 cents overnight and crude and gold selling off, corn drifted lower. Corn still appears to be in a range trade and once we are done with harvest here in the US in the next 2 weeks, traders will concentrate on So. America.
eCBOT Overnight
Contract Last Net Change High Low
ZCZ7 371^6 -4^2 375^6 371^4
ZCH8 388^4 -4^4 392^4 388^4
ZCK8 399^0 -3^6 402^4 399^0
ZCN8 407^6 -4^4 411^6 407^6
Early Opening Calls: 2-4 lower
Top News
-- 110,000 mt of Corn sought in tender floated by S Korea for Feb delivery
-- 29,000 mt of US Corn being tender for by Taiwan, they are also seeking 16,000 mt of US Soybeans, both commodities are for November/December delivery
-- Corn harvest in Monday's USDA report was 73% complete in latest week, up from the 60% pace last week, and up from both the year ago & 5 yr avg of 65% & 69% respectively
-- Sinkhole inching toward key Russian potash mine route could totally stop all shipments within the next 2 to 3 weeks, triggering fertilizer supply concerns
-- Monday's USDA Corn Export Inspections: 43.840 mln mt; expected 39.5 mln mt
-- Hormel Hunger Survey: 60% of Americans believe ethanol has increased food price inflation, 47% oppose government subsidies supporting the biofuel
-- Dalian Corn futures rose 21 Yuan/mt to 1,712 Yuan/mt on 1.29 mln contracts basis the May futures.
-- eCBOT Corn Vol: 121,859; Pit Vol.: 32,755; Open Interest change: +12,406
-- Weather: Normal Temps. Normal to Below Precip West, Normal to Above East. The Corn Belt will be dry today.
-- Outside markets. Energy: crude makes new high of $93.97/bbl, but off $1.25 this AM at 92.30/bbl; Gold -$5.80 & Silver: off 13c; US $ higher vs. Euro & Yen.
Cash Markets
--CIF Corn weaker off 1 -2. Oct. +58 to +60, Nov. +59 to +62, Dec. +60 to +61, Jan. +50 to +52, Feb. +50 to +52, Mar. +50 to +51, A/M +40 to +42
TREND:
Weakness in the spreads mentioned Fri simply went away as the short covering rally today caused bear spreads to be covered as well as flat price. Even with that the new crop markets in KC and Chi pressing toward new contract highs. Charts are shown below.
Corn is also trying to break out of the recent trading range. It will meet with all sorts of increased farmer selling as space is certainly at a premium for the balance of the harvest. Look for the market to have problems on a rally into highs past the Sep/Oct highs.
If you have any questions, or if you would like to discuss specific trade recommendations on any markets, contact me directly.
Jim Riley
Linn Group
877-787-6278
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