Technical consolidation caused mixed overnight trade.
Even though the supply and demand balance sheets were just updated, trade continues to look forward to future commodity use, specifically on corn. Feed grain usage on a whole has been down this year as farmers have fed more non-traditional products, such as distiller grains. There was also more corn made into silage this year, which does not show up in grain usage formulas. Combine these factors with reduced cattle numbers and reduced feed grain demand is quite likely.
Another corn use that will likely change in the future is ethanol production. Economists believe crude oil demand will drop to its lowest level in 15 years this year. At the same time gasoline demand is expected to decline to its lowest level in 11 years. This is slowing the demand we are seeing for ethanol, even though that fuel holds a substantial discount to gasoline at the present time.
While many have enjoyed the mild winter the United States experienced this year, it may cause problems later on. Agronomists are warning that the mild conditions and lack of a significant cold spell could cause insect issues. Even in most mild winters temperatures drop to a level that greatly reduce insect populations. This could become an issue that would not only affect next year’s yields, but profitability as well.
Market Movers: Technical Indicators, Outside Markets
Early Morning Call: 1-2 lower on corn/wheat, 1-2 higher on soybeans