Corn continues to trade inside a tight 10¢ range. U.S. exporters were happy to see better-than-expected weekly corn sales, but there is still talk of traditional buyers like South Korea going to Brazil for supply. The bears continue to question the USDA's export estimate and several are starting to wonder about the ethanol demand number. The fear is with blending margins shrinking here at home, higher priced D5 and D6 RINs and various other dynamics, we will soon start digesting Brazilian ethanol imports. That would obviously be viewed as yet another bearish domestic demand headline.
As for the U.S. crop, I tend to side with the bulls, thinking the current USDA production number is overstated. Unfortunately I don't think it's something the USDA will address anytime soon, as they will need to collect more data. Meaning the market more than likely won't trade a lower U.S. production number for several more weeks. I am hearing a lot more talk about the Southern harvest starting to more rapidly expand. In fact I'm hearing a few more producers in parts of Illinois and Missouri are starting to roll the combines. There continues to be the uncertainty about test weight, but as I mentioned above, I think that cards going to take some time to play itself out.
Lanworth Downgrades Corn Estimates: Lanworth says updated satellite imagery and reported field observations has brought their U.S. corn yield and production estimates down to 166.8bpa and 13.7 billion bushels. FSA-reported acreage data also led to a reduction in their planting estimate to 89.6 million acres. Citing favorable weather, field observations and historically high vegetation density in western states, they raised U.S. soybean yield production estimates to 46.2pba and 3.85 billion bushels. Plantings remain unchanged at 84.2 million acres.