Corn bulls continue to point to strong U.S. demand. There are also some weather-related hiccups in a few areas that will delay harvest and or create some late yield complications. The USDA reported another large sale of corn (239,630 MTs) to Mexico. There was also a sale recently announced to "unknown" destinations, which makes some in the trade scratch its head. I'm also hearing of some position squaring ahead of Friday's USDA Quarterly Grain Stocks report.
There are no domestic or global balance sheet adjustments in this report, those will come in the Oct.11th WASDE. This report will be more of a census of what's taking place and an attempt to tell us how many of last year's bushels were still on hand as of September 1st. For corn it's going to come down to the Feed and Residual number. The average estimate of September 1st U.S. corn stocks is just above 2.0 billion bushels, with the range of guesses somewhere between 1.95 and 2.1 billion. This compares to last years 2017/18 ending stocks estimate of 2.002 billion.
In other words, there's probably not a lot of fireworks coming from the report on Friday, but you never know. There's also a bit of talk floating around that tensions between Russia and Ukraine are heating back up, which could make some of the larger bears a bit nervous. If the algo's start to pick up on heavier headlines out of that area it could certainly trigger some short-covering and perhaps a little buy-side interest. It's worth putting on our radar and perhaps pausing a moment if you are wanting to price more nearby bushels.
An announcement for year-round E15 could also be on the nearby horizon. Net-net, we may have a couple of bullish wild-cards towards the top of the deck that makes the bears a bit more nervous about calling nearby bullish bets.
The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.