Will Patience Pay Off for Old-Crop Corn?
Jan 24, 2014
Corn "demand" continues to remain strong... Good export sales this morning and strong ethanol numbers yesterday. As many suspected, once the weather calmed down ethanol production rebounded. Weekly production jumped sharply from 868,000 to 905,000. Keep in mind last year at this time production was just 792,000. I am afraid we may see similar "yo-yo" type data in the weeks ahead as ethanol plants and refiners battle the wintery elements. I am still hearing reports of strong margins and very strong export interest, so net-net I am looking for continued strong corn demand from the ethanol industry and the USDA to possibly move their demand estimate higher. Keep in mind the reason ethanol stocks have built the past few weeks is because US milage and drive time has been drastically reduced due to extreme weather and harsh road conditions. Even though "demand" is picking up I am afraid without a "supply" side story we will be left trapped in our current range. I suspect this theme could continue through the USDA's Feb "Ag Outlook" and into the March USDA report. Producers should be patient and look to move bushels at the higher end of the range ($4.50 area in old-crop) rather than the lower end of the range ($4.10 area). Spec will need to continue looking for strategies that play a similar game. Click Here for my daily report....
USDA weekly export sales reported this morning were above expectations for both corn and soybeans, wheat exports were inline with most guesses.