Coronavirus Comments Drop Stocks. The Corn & Ethanol Report

We kickoff this morning with MBA Mortgage Applications and MBA 30-Year Mortgage Rate at 6:00 A.M., Producer Price Index (PPI) at 7;30 A.M., Fed Chair Powell testimony at 8:00 A.M., EIA Energy Stocks at 9:30 A.M.,

U.S.30-Year Bond Auction at 12:00 P.M. and Dairy Product Sales at 2:00 P.M..

On the Corn front yesterday’s WASDE data estimate U.S. feed-grain outlook for 2020/21 is for record high production and domestic use, greater exports and larger ending stocks. The corn crop is projected at a record 16.0 billion bushels, up from last year on increased area and return to trend yield. The yield production of 178.5 bushels per acre is based on a weather adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2019 time period. Despite beginning stocks that are down slightly from a year ago, total corn supplies are forecast for a record high at 18.1 billion bushels. Total U.S. corn use in 2020/21 is forecast to rise relative to a year ago with increases for domestic use and exports. Food, seed and industrial (FSI) use is projected to rise 245 million bushels to 6.6 billion. Corn use for ethanol is projected to increase from the current pandemic levels based on expectations of a rebound in gasoline consumption. Sorghum FSI for 2020/21 is lower as expectations of increased sorghum import demand from China reduce available domestic supplies. Corn feed and residual use is projected higher mostly reflecting a larger crop and lower expected prices. U.S. market share is expected to increase from the 2019/20 multi-year low, but remains below the average level seen during 2015/16 to 2019/20 with expected competition from Argentina, Brazil and the Ukraine. The USDA old crop ending stocks were raised to 6 million bushels to 2.098 billion bushels but well below analysts expectations which was due to larger export and feed use assumptions. New crop production was above estimates at 15.995 billion bushels and new crop carryout is forecasted at 3.318 billion bushels, which is also below estimates. South American old crop production was unchanged. CONAB raised Brazil’s second corn crop forecast by 0.4 MMT for MY production total to 102.3bb. In the overnight electronic session the July Corn is currently trading at 320 ¾ which is 1 ½ of a cent lower. The trading range has been 322 to 319 ½.

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