Early Market Talk October 1, 2020


Largest ever stocks deviation from September WASDE to September NASS quarterly stocks report. Brings up a multitude of questions and lending additional price strength overnight. Nearly 250 mln bu of corn evaporated yesterday with a revision to the June stocks data the major contributor. Should have suspected something other than a feed /res issue given the stats we looked at earlier in the week comparing 3rd qtr. feed use vs 4th qtr. Any bets it’s a crop overestimation yet from 2019?

Biggest category change was on farm corn stocks down 158 mln of the 204 mln bu June revision.

Data yesterday implies feed /res use for 19/20 closer to 5,900 mln bu compared to current 5,600 estimate. Some will no doubt try to extrapolate a year / year increase into 20/21 crop year. May prove a mistake to do so.

At 0630 CZ20 up another 3 ¾¢ at $3.82 ¾ with SX20 9 ¼¢ higher at $10.32 ¾. Solid volume of 29 and 24K contracts on these two. KC whet giving back a couple cents this morning.

Corn and soybean open interest up 13 and 9K contracts respectively yesterday on the rally.

Funds credited with buying 40K corn and 30K soybeans yesterday bringing their estimated net longs to 110 and 215K respectively. Proven true once more, every time Funds hold a big net short and cover, they have always built a net long of at least 100K.

CZ20 trading a new high for the move overnight and the highest price since March 6th. Price scatter would suggest CZ20 high enough with a 15:1 ratio as offered with stocks adjustment.

StoneX customer driven production survey data being gathered this week with be tabulated later today with results this afternoon. Thanks to all those that contribute.

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