Morning Market Review by Bryce Knorr
Futures are trading mostly lower this morning, with losses on international financial markets adding to pressure from yesterday’s downturn.
Corn is trying to turn around, as U.S. traders report to work, after more disappointing news about export demand sent prices lower on Thursday.
Export Sales came in at just 5.6 million bushels in the latest week, less than even lackluster trade estimates and well below the rate forecast by USDA for the marketing year.
The lack of demand means farmers are absorbing the full cost of soaring barge rates on the river system, which increased the cost of shipping corn from St. Louis to the Gulf by more than 30 cents over the past week. Cash bids are better in the western Corn Belt, which is shipping grain to deficit areas in the east already. For more on the trends, see my Weekly Basis Review; track the trends in your areas with our Cash & Basis Charts.
Volume fell almost 15% on Thursday to 234,152, according to the preliminary report from the CBOT. Open interest was up 997 on active fund selling.
Storms are moving across the Midwest this morning from Arkansas to Michigan, with colder temperatures settling in over the region. Hurricane Sandy is expected to make landfall around Delaware on Tuesday, bringing rains to the eastern Corn Belt including Ohio, keeping the tail end of harvest there typically slow.
Rains are also working through northern Argentina today, keeping corn planting there 18% behind last year. Overseas prices are mixed today. Futures on the Dalian exchange in China fell .34% but corn in Paris is up .2%.
Weak outside markets are again providing headwinds, discouraging investors from taking risk in commodities. Poor earnings reports continue to weigh down Wall Street, with stock index futures sharply lower after losses in Asia and Europe today. That could change, or not, depending on the Third quarter GDP reading due out at 7:30, which is forecast to come in at 1.9%. However, a weak Durable Goods orders report Thursday drained confidence; though the overall figure rose almost 10% in September, the reading without defense and aircraft was flat. Other data yesterday was more benign: the Pending Home Sales rose, though less than anticipated, the latest in a string of reports showing growth in the sector, while Weekly Unemployment Claims fell as expected
Soybeans are leading the market lower, burdened by weak outside markets, questions about demand and the expiration of November options today.