Benchmark US corn prices are struggling to regain momentum after slumping 14% from mid-July’s bad-weather inspired highs amid the wider commodity market downturn. On the supply side, moderate temperatures have kept the past week’s Midwestern growing conditions for corn and soybeans at “nearly ideal” conditions over the past week, according to USDA, with rainfall concentrated over the southern and western corn belt. A steady 70% of the US corn crop remains rated in good or excellent condition, down from last year but a marked improvement from the late summer conditions reported in the previous three years.
Domestic ethanol production indicators are offering little in the way of an immediate uplift for the ethanol crush after a heady summer of production and blending. DOE’s weekly US fuel data set showed US ethanol producers responding to relatively slim margins by lowering output nearly half a percent WoW to 961,000b/d, even as blenders chose to siphon further product from stocks to meet slowing late driving-season blending demand. US ethanol output remains historically strong, up 6.5% YoY relative to a 5% rise in stocks YoY. Even so, producers’ performance has slackened since the start of July when output was up 9% YoY, with gasoline demand set for a marked seasonal slowdown as the Labor day end of summer bookend approaches. While overseas demand for US ethanol typically picks up some of the post-driving season slack, the slumping Brazilian Real will this year tip the scales firmly in the favour of south American rivals. YoY the Real has plunged 55% versus the dollar.
Export demand for corn has offered little in the way of a helping hand. Net sales for 2014/2015 this week hit a marketing year low, with exports also down 6% WoW. Marketing year shipments to overseas buyers are down 4.4% compared to year-ago levels.