07/27/2016 8:25:06 AM
Corn followed soybeans higher, rallying over the last two hours of the overnight trade. That took it from trading around steady to trading 2-4 cents higher. CZ has next daily resistance at $3.46.
Open interest in corn was up more than 12K contracts in light volume on Monday. This implies additional fund selling (new short) and end-user buying (new long).
The USDA announced the sale of 75K tons of old crop and 174K tons of new crop corn to an unknown destination through the daily reporting system.
Rains will impact the Midwest over the next couple of days with drier weather in store for the weekend and then another round of rain early next week. Beyond that event, the forecast trends drier and warmer though not enough to do significant damage to US corn. Temperatures will heat up in China but they too have had plenty of moisture this year. Ukraine sees above normal precipitation in the forecast. Together those three nations represent around 60% of world production.
US corn basis continued to improve yesterday, especially in IA, MO and IL.
Ethanol margins have been falling back from very high levels this month but they remain in the black. The 9:30 AM weekly energy report will update the market on US ethanol production and stocks.