Corn bears continue to argue that second-crop corn production in Brazil is improving and that the USDA might eventually need to bump their total Brazilian corn crop production estimate higher by 2-3 MMTs. A few of the bulls are still arguing that several problem areas remain inside Brazil, especially up in the northeastern parts where hot/dry conditions continue to persist and complicate production.

Unfortunately, I'm thinking the bulls are a bit desperate for a headline and are making a somewhat unrealistic stretch. We also have to keep in mind that several sources inside Argentina are forecasting a record crop, and the USDA may have to eventually adjust that estimate higher as well.

Here at home there's really nothing new to report. Export demand, while perhaps improving a bit nearby, still appears to be a bit overly optimistic by the USDA.  Weekly ethanol production was strong this past week, reported at 975,000 barrels per day vs. 969 thousand last week. Weekly production was up just over 1% compared to last year and is still within about 3% of our all-time weekly high.

To put this in perspective for corn consumption, we are still chewing though about 102 million bushels give or take from one week to the next. Unfortunately, U.S. weekly ethanol stocks continue to creep higher. This week the report showed the U.S. with 23.218 million barrels in storage another new record vs. 22.956 in storage last week. Compared year-to-year, U.S. ethanol stocks are about +10% higher than they were last year.

As a producer holding old-crop supply I still remain patient in regard to reducing any additional price risk at this juncture. I continue to see heavy technical resistance in new-crop up between $3.95 and $4.10 per bushel vs. the DEC16 contract. As a spec, I have to believe selling a rally into that area is a possible short-term play. From a longer-term perspective, I still like the thought of staying patient and waiting for a deeper break in price.

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