Pre-Opening Corn Market Report for 9/9/2011

December corn was up 3 cents late in the overnight session. Outside market forces look weak today with a strong US dollar and weakness in equity and energy markets. There have still been no deliveries for September corn. The results of the USDA Crop Production and Supply/Demand reports Monday morning will set the tone for the market next week. Harvest pressures and talk of the overbought condition of the market plus talk that feedwheat prices are below corn prices from many world locations helped to pressure the market in recent days. Deteriorating crop conditions in recent weeks plus yield reports from the field suggest a lower production forecast for the reports Monday. Funds were noted sellers yesterday and so were commercial firms, who absorbing the early harvest selling pressures. These sellers kept the market under pressure for much of the day, and the market pushed to the lowest level since August 22nd. A strong dollar and weakness in wheat were seen as negative forces as well. Private exporters reported a sale of 161,900 tonnes of US corn sold to South Korea. For the reports on Monday, traders are looking for a yield near 148.8 bushels per acre and corn production near 12.505 billion bushels. Ending stocks are expected to come in near 636 million bushels as compared with 714 million last month and 940 million for the 2010/11 season, which just ended. Ethanol production for the week ending September 2nd averaged 896,000 barrels per day. This is up 0.90% vs. last week and up 2.4% vs. last year. Corn used in last week's production for the new crop season is estimated at 27.27 million bushels. For the entire week (which consisted partly of the old crop marketing year and partly of the new crop), corn usage was 95.44 million bushels. Corn usage needs to average 98 million bushels per week to reach the new crop ethanol usage estimate of 5.1 billion bushels. Stocks as of September 2nd were 17.082 million barrels, down 4.5% from last week. This boosted implied demand to a 4 week high and to its 2nd highest in the past 9 weeks. Total corn usage for the 2010/11 season was estimated at 4.945 billion bushels, which suggests that the USDA may reduce the corn for ethanol demand down by 75 million bushels. If so, and other demand numbers are left unchanged, ending stocks for the 2010/11 season could be adjusted to 1.015 billion bushels. Traders see weekly export sales in the US, for release before the opening, near 800,000 tonnes.

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.

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