July corn was trading 3 cents higher into 7:30 AM central time. Outside market forces look bearish with weak PMI data from China and the UK and a surge higher in the US dollar. Ideas that the fund-led selling in July corn may have driven the market too cheap help to support the bounce overnight. Rain and cooler weather was badly needed this week to avoid extreme stress on the crop but some areas received only 1/2 inch or less so far which will only stabilize crop conditions for a week or so. The 6-10 day is not too hot but there is not much moisture and the 11-15 day forecast models show more heat and dryness into the middle of the month. The somewhat threatening forecast may have helped corn hold mostly steady over the past week while other commodity markets have remained under heavy selling pressures. Corn is now discount to feedwheat and this may help support better usage. July corn closed slightly lower yesterday but still saw the lowest close since December of 2010. A continued flow of long liquidation selling from fund traders pushed the market lower late in the day. December corn was still slightly higher on the day late in the session with some weather concerns helping to support. Weakness in energy markets and a break in the stock market plus further gains in the US dollar helped to pressure but even with the recovery in the stock market to higher on the day, grain markets did not react much. Ethanol production averaged 902,000 barrels per day last week, down 1.8% vs. the previous week and down 0.77% vs. last year. Corn used in last week's production is estimated at 96 million bushels as compared with 93.5 million bushels necessary each week to meet the USDA estimate for the season. Traders see weekly export sales for release in the morning near 550,000 tonnes.
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