Corn up 20¢ overnight on extremely heavy volume. USDA reports yesterday showed the largest corn yield decline between a Nov and Jan report ever. That coupled with arguing over the drop in export demand that may or may not happen have some debating rationing to come. China corn imports increased from 16.5 to 17.5 mmt. Combined South American corn production off 2.5 mmt as well. Corn feed use off 50 mln bu. Suspect further drop in corn feed use with $3.00 corn fed with a shovel and $5.00 corn a spoon.
At 0600 CH21 up 20 ½¢ at $5.37 ½ with SH21 just 4¢ higher at $14.22 ¼. Overnight vol on these two contracts 99and 37K respectively. KC and Chi wheat up double digits.
Dow futures off 57 points at 30,917. Crude up 21¢ at $53.42. US $ firm.
SBSX out to a $2.33 inverse overnight. Largest inverse ever on this spread was $3.62 ¼ in July of 2013.
Funds credited with buying 40K corn and 30K soybeans yesterday. Can understand the bean number but question corn with the lead three months locked limit. Must wait another week for CFTC data to pick up yesterday’s activity. Regardless, we show Funds net long 367K corn and 202K soybeans as of this morning. Record long position was just over 409K in March of 2011. In March of 2011 CN11 hit $7.45. That wasn’t the high for the year either. That came in June of that year at $7.99 ¾. Stocks use ratio then was half what it is estimated today.
CHCK out to 3 ½¢ carry overnight but backed off to 2 ½ at this writing. CUCZ out to 25 ¼¢ inverse overnight.
Weather Headlines: Significant improvements in soil moisture expected in Brazil. Long term outlook remains warm and dry in Argentina.
Interested to see what week / week soybean crush margin looks like. Out with that later this morning…
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