December corn is trading 4 1/2 cents lower near 7:00 am CST and there were no September corn deliveries overnight. Dalian corn traded lower overnight along with Chinese equity markets. The corn market held steady for most of the evening however grains fell under significant pressure once European markets opened. Investor moods have soured ahead of the ECB meeting on Thursday where many feel a new, long term debt purchasing program will be unveiled. US Stocks are trading lower following yesterday's worse than expected US factory data. Growing signs that global economies are slowing has most commodities on the defensive this morning.
December corn continues to hover near 800 as bulls argue the corn crop is smaller than the August USDA report and bears point toward signs of demand rationing, specifically in the export sector. A surging soybean market has provided underlying support to corn but gains have been limited as traders take profits on rallies. Worse than expected yield reports from the country continue to give corn a positive tilt but the market is beginning to focus its attention on next week's USDA report. Calendar spread selling has been prevalent since last week with the December contract now trading a 3 cent discount to the March contract as new crop harvest begins to pick up its pace and basis weakens in specific markets.
The weekly Corn Harvest report came in near market expectations showing 10% complete compared to 6% last week and 3% last year. The 10 year average for this time of year is 3%. Areas of the southern Midwest continue to move ahead of the average pace with Tennessee 49% complete and Missouri 44% complete. Light rainfall is expected for the central Midwest this week but a dry pattern will develop into next week which should move harvest along with limited delays. Disruptions to harvest will be isolated to specific areas and there is currently no threat of another Tropical Storm entering the New Orleans or Texas Gulf Coasts.
The weekly Corn Conditions report was unchanged from the week prior with 22% of the crop rated good/excellent. The 10 year average for this time of year is 58%. The lowest good/excellent rating for this time of year is 17% in 1988. The report also kept poor/very poor ratings unchanged at 52% vs. 21% last year and the 10 year average pegged at 18%. Nebraska and Iowa both lost 1 to 2 points respectively following last week's above average heat and lack of rainfall. Crop ratings are beginning to take on less importance in the market with 41% of the crop mature and harvest now underway.
Cash basis for corn was steady to slightly weaker yesterday as traders look ahead to harvest. It's being reported that bids weakened in northern Ohio and western Iowa but markets held steady in much of the central Midwest. Decatur, IL corn bids were unchanged at 40 cents over the December contract. Records show bids last year for central Illinois corn average 15 cents over the respective nearby option and the 3 year average is 10 cents under. Bids in the Gulf of Mexico were steady with very little export business around besides inelastic demand from normal customers.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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