It was a disappointing day for bulls as an early session rally faded as the day wore on with corn finishing slightly lower. CU settled a penny in the red; CZ was off ½ cent. Commodity funds were buyers early but turned to selling later in the session. Funds were estimated to have sold 4000 corn contracts as of midday. Corn rallied overnight and this morning with double digit gains reached on talk of Chinese buying and on a decline in corn condition in yesterday afternoon’s Crop Conditions Report. Rumors had China buying 1.5 to 2.0 MMTs of U.S. corn for December – February shipment. NASS yesterday afternoon estimated that 64% of U.S. corn is in good or excellent condition, down 1% from last week. Hot and dry weather the first half of this week in the western corn belt will likely lead to a further rating decline next Monday. The run-up didn’t hold however, as traders were content to book profits given the recent trend of short-lived rallies and with talk that the eastern corn belt crop is in very good shape and will produce record or near record high yields. The weekly EIA energy report is due tomorrow morning and traders expect production to be steady with the previous week, but with ethanol inventories rising again, after the big jump of more than 1.3 million barrels last week. Higher inventories will likely have a negative effect on production levels as we wrap up the 2020/21 marketing year.
Soybeans were mixed today with the front 4 months modestly higher and deferred contracts slightly lower. SQ settled 5 ½ cents higher, SX gained 1 ¾ cents, and SH was ½ cent lower. Commodity sellers were buyers of an estimated 4000 soybean contracts as of midday. Beans raced to strong gains this morning, with SX up nearly 30 cents on lower crop ratings and rumors that China would buy more U.S. soybeans. Yesterday’s Crop Conditions Report estimated that 58% of U.S. soybeans were in good or excellent condition, down 2% from a week ago and probably higher than next week’s report will indicate. A wave of profit taking weighed on prices at mid-morning as traders continued the recent trend of being unwilling to chase rallies. The Rosario Grain Exchange projected Argentine new crop soybean acreage decreasing 1.5% from last year due to higher export taxes and better returns from corn.
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