Corn dominated trade volume overnight with the front end of that complex acting as the grain market buoy this week, amid a series of flash sales to China; speculators have wiped out a fairly substantial net corn long in just over a month, but the funds are creeping back in at discounted prices.
This afternoon’s USDA Cattle on Feed Report is expected to show all U.S. cattle on feed as of March 1 at 11.620 million head, or 95.5% of last year; February placements are seen at 94.0% of last year, while February marketings are estimated at 95.6% of last season.
Rain and snow fell across the Midwest yesterday with some scattered action in the southern Plains, running drier up into next week after rains move out of the ECB today. Conditions remains mostly cool and wet going forward.
Argentina will see decent rains over the next five days, for what it is worth, then move back drier again for the 6-10 day. Brazil again saw scattered rains north to south yesterday with chances best in the north and west over the next ten days, leaving some dryness concerns for northeastern Safrinha corn areas.
The main struggle for the corn complex this year has been poor demand. This is from many of the United States’ traditional buyers going elsewhere for needs. Two of the most noted are Japan and Colombia who traditionally combine for 25% of US corn exports. Corn sales to Japan this year are down 56% from normal, and Colombia’s imports are down a huge 89%. This loss of business is a primary reason why US corn exports in January were a three-year low for the month. If we take China out of the equation, US corn demand is at a ten-year low. This is why the loss of Chinese buying has caused US sales drop as far as they have. We did see China step in and book nearly 50 million bushels of US corn this week, but trade reaction was muted. This demand still didn’t make up for the reduction the USDA made to corn exports in the March WASDE report. Until we see corn sales top the projected volume, trade may be slow to react. This is especially with cheaper corn now coming out of Ukraine as that country wraps up its wheat exports. Importers also know that in a few months cheaper corn will be coming out of Brazil.
Have a momentous day!