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Too early to call corn low

For The Week: for the week of October 27, December corn futures value
increased 7.7%, November soybean futures value increased 7.2% and December
CBOT SRWW value increased 1 percent.

For The Month: for the month of October, December corn futures value down
18%, November soybean futures value down 11% and December CBOT SRWW value
down 21%.

Corn Commentary: corn endured its second consecutive lower day on Friday at
the hands of a weaker crude oil futures market, and stronger US dollar.
Harvest progress expected to be positive at least through much of the
weekend and first two days of next week, is expected to find delayed as we
approach the middle of next week.

A bright spot to begin the day on Friday was S Korea's purchase of 55
K tonnes of US corn.

With USDA using a target of 1.95 billion bushels for 2008/09 market
year, cumulative sales as percent of the target are 34% which is identical
to the five year ave.

Argentina corn planting is working with near ideal conditions and has
its sight set on 19 million tonnes of corn production vs 20.5 MT in 2007.

South Africa continues to struggle with dry weather for its corn
planting and has an initial target of 11.5 MT vs 12.5 MT in 2007.

Until this years corn harvest is at a minimum of 60% complete,
Allendale can not call for a potential harvest low. Basis levels remain
strong.

Allendale's research suggest those who are beginning to feed poultry
and pork are likely to have positive profit margins but the cattle continue
to remain in the red. Broiler egg set is trending higher on a weekly basis
from its recent low on Oct 4th. Look for broilers chicks placed to have set
its low Oct 29th and now potentially working higher. As a reminder, poultry
consume 50% of all the annual soymeal production in the US.

Bearish to corn is the rumor, Mexico may be interested in importing
Black Sea origin feedwheat vs US corn.

On the day it is estimated funds sold 5500 contracts of corn.

Corn Technical Commentary: 4276 is immediate resistance, additional
resistance is 4480 chart gap to 4530. Key short term support of 3950 held.

Vital Technical Indicator: the next projected major turn day is forecasted
for November 11.

Trade Idea(s): Stand Aside.

Option Strategy(s): Bought 1 370 call @ 31 . Risk to 17. Obj 60.

Special: Ethanol; The Energy Information Administration has released its
most recent ethanol production and end stocks data (for the month of
August). Thursday's report is the final for the 2007/08 marketing year. The
EIA has released its month of August ethanol production estimate at a
record 20.1 million barrels vs July's production of 19 mb. The 20.1 million
barrels of August 2008 production represents an increase of 49% vs August
of 2007. With record production of ethanol in the month of August, total
corn used for the 2007/08 fell short 16 million bushels from a target of 3
billion bushel and may likely have the 16 million added to carry in stocks
for the 2008/09 marketing year.

More news from the EIA is the August ethanol end stocks level had an
increase to a level of 14.9 million barrels (a new record amount) vs 13.2
mb in July. One year ago for the month of August ethanol end stocks were
estimated to be 10.3 million barrels. This suggest a year on year stock
build of 45%.

Conclusion: increasing production of ethanol is bullish but increasing
stocks is viewed as bearish.

Looking Forward: of the most recent nine years, August to Sept ethanol
production has increased three of nine years, decreased three of nine and
went unchanged three of nine. With regards to end stocks of the most recent
nine years, seven of the years had stocks increased.

World Grain Report: The International Grains Council released new
supply/demand data for corn and wheat on Thursday. Verses month earlier
estimates, wheat production up 7 million tonnes, however consumption
increased enough to result in end stocks trimmed by 3 million tonnes to a
new estimated level of 150 million tonnes vs year earlier levels of 118
million tonnes. Verses month earlier estimates, corn production up 23
million tonnes, however consumption decreased enough to result in end
stocks increased by 2 million tonnes to a new estimated level of 111
million tonnes vs year earlier levels of 128 million tonnes.

For The Week: for the week of October 27, December corn futures value increased 7.7%, November soybean futures value increased 7.2% and December CBOT SRWW value increased 1 percent.

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