Corn finally stopped the free fall yesterday as it jumped up to challenge the 10DMA and closed up 7 cents for December futures. Some of the strength today could be attributed to the unexpected 3% drop in crop ratings last night, and we were also probably looking at some short covering by managed money ahead of Thursdays report.
Ethanol discussions have hit a roadblock with the biofuel lobby telling the administration it will accept no compromise and will only be satisfied if the EPA reallocates the full measure of the SREs(small refinery exemptions) to other refiners to make up for the loss in RIN (renewable identification number) values it experienced this year.
After yesterday’s buying, the funds are now short 151,000 corn contracts with momentum still heavily to the short side.
Estimates for Thursdays report are expecting a reduction of 2 bpa for corn yield to 167.2 and total production to drop to 13.672 billion bu. down from 13.901 in August. 2018-19 corn stocks are estimated at 2.401 billion bu which is up from the August report by 41 million. Estimates for the 2019-20 corn stocks are 2.002 billion bu. down 179 million bushel.
Overnight markets are lower as traders continue to position ahead of tomorrows report.
Have a Safe Day!