Pre-Opening Corn Market Report for 4/28/2011

July corn was up 3 cents late in the overnight session. Outside market forces look positive today with another new low for the US dollar and new highs for metal markets. It appears that the worst of the heavy rains for the Midwest have moved out and the market now faces a more normal weather outlook. The western Corn Belt may see increased planting next week with a dry window for Iowa and Nebraska and southern Minnesota, but record or near record April rainfall for Illinois, Indiana and Ohio suggests there will be little planting done over the next week, and there is more rain in the forecast for next week as well. With waterlogged soils in these states, traders will remain very sensitive to weather forecasts. Any shift to more rain is likely to cause significant concerns for planted acreage and yield. The drier forecast for next week has been an offset to positive outside market forces, and new buyers may need few reasons from a supply/demand perspective to enter. July corn saw a break of more than 11 cents in the last 15 minutes of trade yesterday to close sharply lower on the day. Mid-day weather models confirmed overnight models that had shown a drier trend for the western Corn Belt for next week, and this helped spark long liquidation selling. December corn was down 15 cents into the mid-session. Ethanol production for the week ending April 22nd averaged 883,000 barrels per day. This was up 3.15% from the previous week and up 6.13% from a year ago. The amount of corn used in last week's ethanol production was estimated at 92.7 million bushels. This crop year's cumulative amount of corn used for ethanol production is 3.12 billion bushels. Corn use needs to average 100.3 million bushels per week to meet the USDA forecast. Ethanol stocks totaled 19.283 million barrels. This was down 4.02% from the previous week and down 2.03% from last year. The sharp drop in stocks over the last two weeks suggests strong implied demand for ethanol. Ukrainian officials have decided to remove current export quotas for corn. This follows indications from the Agriculture Minister last week that there may be near 2 million tonnes of excess corn. Traders see weekly export sales, for release before the opening, near 900,000 tonnes. South Korea is tendering to buy 110,000 tonnes of feedwheat. Taiwan is tendering to buy 29,000 tonnes of US corn.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics