Corn prices remain in an extremely narrow trading range, not trading above $4.50 or below $4.32 during the entire month of October. Basically, since Washington turned the lights out on the USDA on Oct. 1, U.S. corn prices have not ventured far from the $4.40 area.
Demand for U.S. exports is thought to be improving, but no one knows for certain. There were once again rumors of China being in the market and actually securing another 3-7 cargoes of U.S. corn for Mar-May deliveries at around $260 per metric ton (CIF). Talk is China has purchased some 1.2 MMT's of U.S. corn during the month of Oct. vs. about 1.6 MMT's in total corn purchases (from various sources) in the first 8 months of the marketing year. The margins for importing corn into China right now are extremely profitable, and with U.S. prices becoming more competitive with Ukraine, Argentina and Brazilian exporters, hopes are more U.S. business will be done. Keep in mind, U.S. corn prices are some 25% cheaper than domestic Chinese corn prices.
The bulls are also talking about the fact that Argentina and Brazil might plant 4-5% fewer corn acres this coming crop year. The problem is U.S. yields continue to creep higher. A yield in the 160s is now being discussed by more and more traders and thoughts of a 14.0 billion bushel plus crop has become a reality. Hence, NEW all-time record production from the worlds #1 corn producer is continuing to keep a lid on prices.
Ethanol Talk: There is talk that even though the recently released EPA reduction to the RFS was supposedly just a "draft proposal"...most sources inside the industry seem to believe some type of cut or adjustment to the current biofuels mandate is coming sooner rather than later. On the bright side there is reason to believe a cut in the advanced biofuel mandate might push out a good portion of Brazilian sugar-based fuel imports. Meaning hopefully we can digest a little good with the bad.
Mexico Bans GMO Corn: This was actually floating around a few days ago, but now there are more stories circulating in regard to Mexico's latest stance against GMO corn. From what is being reported a Mexico judge placed an indefinite ban on GMO corn. Some sources are saying, "effective immediately, companies like Monsanto and DuPont/Pioneer will no longer be allowed to plant or sell their corn within the country’s borders." Click Here for full story.