Corn weekly: October 13, 2018

CORN FUTURES ACTIVITY

Today’s corn futures

Today’s ethanol futures

Corn – CFTC position of traders

Contracts of 5,000 Bushels

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Comments:

• Corn futures break support: A WASDE report that was perceived as bullish took the market to break support at around $3.68 Dec-18, a level that the market was struggling to break. Next support level is close to $3.80. From a technical perspective, futures don’t have a strong bias in either direction. RSI is 54.4 percent.

Dec-18 Corn Futures

• Oil refining industry threatens to sue if year around E15 is implemented: The oil industry has already threatened to sue if President Donald Trump lifts summer restrictions of E15. According to experts, President Trump needs congress approval to change the rule. The Trump Administration might push to amend the rule before the election in order to regain farmers trust, a core constituency. Some farmers are not happy due to the trade dispute with China.
• Corn exports maintain blistering pace: Net corn export sales for the week of Oct. 4 were just over 1.0 MMT, down 30 percent from the week before but still good for this time of year, especially considering the volume of carryover sales from last season. Outstanding sales were 14.5 MMT, up 46 percent from a year ago. Weekly shipments were just over 1.6 MMT. Mexico, Japan, and South Korea were the primary destinations.
• Ethanol production down while use and ending stocks go up: Daily ethanol production averaged 1.0 million barrels during the last week of September, up nearly 3 percent from the week prior and 8 percent higher than a year ago. Use by blenders and refiners averaged 913,000 barrels per day, about on par from the week before and down nearly 3 percent from this time last year. Weekly ending stocks, at 22.0 million barrels, rose 3 percent from last week and were up almost 13 percent from a year ago.
• WASDE: Lower corn yield/higher exports: USDA decreased corn yield by 0.6 bushels per acre (bpa) to 1807.7 bpa, in a move that surprised the market. Analysts were expecting yield to increase or remain the same. As a consequence, total corn production is now projected at 14.778 billion bushels, slightly lower than last month, but still the second largest. On the demand side, the most important move was an increase of 75 million bushels to the export category. This move is line with the recent strong demand. So far this crop year, corn export sales are 67 percent above the same period last year.