Good afternoon. Corn closed fractionally mixed in a 6-10 cent trading range, leaving volatility to soybeans and wheat today. Funds were buyers of 7,000 contracts at mid-session and hold an estimated long position of 373,000 contracts. Talk of funds buying commodities as an inflation hedge seems to have reentered the market today. Concern over S. American corn production potential remains in the news with talk of lowering Brazil/Argy corn production another 12 MMT. That would put them at 157 MMT, but still 20 MMT more than last year. Brazil losses are tempered by better weather in the second crop area (center west) compared to the first corn crop area (southern Brazil, which is in drought). The weekly ethanol report shows production up 4.7% from the week prior and 11.4% more than last year. Ethanol stocks also higher, gaining 681,000 barrels for an inventory of 23.6 mln. barrels. Corn used for ethanol production estimated at 109 mln. bu. Crude oil futures are making new highs in the nearby with February crude making a run at $88 after dropping to the $65 level in early December. The DOW is trying to firm today but it’s been a tough week. Weekly export sales in the morning expected in the 500-1,000 tmt range, so not much confidence in what will be announced. China is rumored to be shopping for new crop U.S. corn. This seems like a long 4-day trading week.
Soybeans
Up, up, and away as soybeans closed 33-34 cents higher, but off session highs, as buyers entered the market on inflation and SA production concerns. Funds were buyers of 15,000 contracts at mid-day and have an estimated long position of 125,000 contracts. SBM and SBO oil also higher with funds on the buy side. Talk of Brazil’s bean production below 130 MMT has traders interested to say the least. S. American production of 183 MMT was in the market today (last year 196 MMT for comparison). If so, and demand remains steady, world ending stocks would be 21.5%. All this is just speculation, but it shows where the strength comes from. Weekly export sales in the morning estimated at 600-1,200 tmt, so quite a range. China is thought to be shopping for new crop U.S. beans.
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