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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Can the Corn Rebound Last thru Today?

Dec 10, 2013

Corn slowly rebounding from last Monday's $4.18^4 low in the MAR14 contract on more short-side covering ahead of today's USDA report. Trade still concerned about the Chinese move to reject what is thought to now be some 15-20 cargoes of US corn. Syngenta is saying they applied for approval of the MIR 162 genetics back in 2010, so there is obviously more to this story than the GMO concerns.  It obviously has more to do with domestic supplies and exporters who have been able to dupe the Chinese government in regards to the origination of the bushels. Anyway you slice it the uncertainty is cause for concern and is not only an issue for Chinese importers but is also causing US exporters to halt shipments of corn to China. obviously nobody wants their shipments kicked or rejected so the search is on for alternative buyers.  Unfortunately some exporters are being forced to seek the cargoes at a discount to keep the wheels turning.  This ultimately could weaken the basis to some degree in the days ahead. Make sure you are putting all the pieces together.  Wouldn't be surprised to see a more bearish "wild-card" thrown at the corn market today by the USDA.  Just don't think it will be as bullish as some are anticipating... Keep hedges in place! 

Corn - Trade remains somewhat uncertain about ending stocks moving forward.  Will the recent gains in demand ultimately be offset by an even larger record crop?  Will test weights ... Click here for all my comments...


Exports - Currently the USDA has exports estimated at 1.4 billion bushels.  Keep in mind this number was pushed higher in the Nov report from the Sept estimate of 1.225 billion bushels. Talk is the USDA may make another adjustment higher...Click here for all my daily comments... 

Ethanol Currently the USDA is estimating 4.9 billion bushels of corn will be used for ethanol. This is up from the 4.648 used last year but still below the 5.0 billion bushels used in 2011/12. Ethanol margins have been strong and there is talk.....Click here for all my daily comments... 

Feed & Residual - Currently the USDA is using 5.2 billion bushels, up form the 5.1 billion estimate back in the Sept report and massively higher than the 4.333 billion used last year and the 4.577 used in 2011/12.  This could be the one that shocks .....Click here for all my daily comments...

Chinese Production There was some talk late last week that the current Chinese corn crop may actually be bigger than originally anticipated.  China talking...Click for all my daily comments... 

South American Production - There is talk the USDA will lower Argentine production for sure and possibly even Brazil's corn production on fewer acres of full-season and second-crop corn being planted. From my perspective the USDA already has...Click here for all my daily comments...

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