Jan. 10, 2014, 5:08 AM
- The U.S. Department of Agriculture is expected to lift its estimate today for the 2013 corn harvest (CORN) to 14.05B bushels from a prediction in December of 13.99B bushels.
- That would make last year's output the largest in U.S. history, surpassing the crop of 13.1B bushels in 2009.
- If confirmed, the estimates are likely to add pressure to corn prices, which hit a 3 1/2 year low of $4.08 a bushel yesterday before closing at $4.12. That was still down 1.2%, with the decline also due to falling exports. Corn has dropped 2.4% this year after plummeting 40% in 2013.
- Wheat prices suffered as well yesterday from poor overseas sales, hitting a two-year low of $5.785 a bushel before recovering a bit to close -0.8% at $5.8425.
- ETFs: DBA, RJA, WEAT, DAG, JJA, AGA, RGRA, AGF, FUD, USAG, DIRT, UAG, WEET, TAGS, ADZ
Jan. 7, 2014, 11:35 AM
- China reportedly has turned away more U.S. corn cargoes due to the discovery of an unapproved genetically-modified strain, and traders say further rejections are likely.
- A report yesterday said China had rejected 601K metric tons of corn and corn by-products from the U.S. by year-end 2013 and suggested that more corn cargoes had been turned away since Dec. 20, when 545K metric tons had been refused.
- Chicago corn futures (CORN), which have been under pressure from rising global supplies and China's cancellation of U.S. cargoes, climbed another 0.5% Monday; the GMO corn is developed by Syngenta (SYT).
Dec. 6, 2013, 6:42 PM
- Corn futures (CORN) fell amid mounting concerns that export demand will suffer because China has been rejecting U.S. grain containing an unapproved genetically modified strain.
- This week, China rejected more than 120K metric tons in five separate shipments of U.S. corn after inspectors found the genetically engineered insect-resistant MIR 162 strain; regulators had rejected U.S. grain for the same reason last month.
- Traders worry the actions could herald a period of reduced shipments to China from the U.S., the world's biggest corn producer and exporter.
- Biotech company Syngenta (SYT) has resubmitted an application for the GMO strain to be allowed in China.
Nov. 16, 2013, 8:25 AM
- Ethanol producers vow to fight back against the EPA's proposal to lower the annual requirement for the biofuel used in gasoline.
- Archer Daniels Midland (ADM) complained it had invested in renewable fuel projects "on the basis of firm legislative commitments" and across two presidential administrations.
- Green Plains (GPRE) CEO Todd Becker calls the prospect of the U.S. turning away from a cheap and domestically produced fuel source "disgraceful."
- Although "disappointed," Renewable Energy (REGI) CEO Daniel Oh says the company's scale would "allow us to continue to succeed."
- "While we still think a large U.S. corn crop in 2013 will benefit other ADM businesses, we see the renewable fuel proposal as adding risk to the shares," says S&P Capital IQ's Tom Graves, who downgraded ADM shares to Sell from Hold after the announcement.
- Also: PEIX, GEVO, BIOF, SZYM, SYNM, AMRS, KIOR.
- ETF: CORN.
Nov. 15, 2013, 3:09 PM
- The EPA is proposing a range of 15B-15.52B gallons of renewable fuel in 2014, nearly 3B fewer gallons of biofuel to be blended into gasoline than mandated by the original 2007 law.
- The new proposal angers farm groups, corn ethanol producers and supporters of biodiesel, but it's a victory for oil companies, which have long argued that if the content of ethanol in motor fuel exceeded 10% - i.e., the "blend wall" - it might damage cars, motorcycles and lawn mowers.
- The administration also is setting a 2B-2.5B gallon target range for all advanced biofuels (earlier).
- Among the biggest movers: PEIX +13%, ADM -2.9%.
- Refiners: VLO +0.8%, HFC -0.4%, PSX -0.5%, TSO -0.3%.
- ETF: CORN -1.2%.
Oct. 5, 2013, 8:25 AM
- The U.S. government shutdown and the resulting lack of official statistics are prompting traders to shun agricultural commodities due to concerns about the vacuum of information and fears of a data dump that will hit markets hard when the shutdown ends.
- Likely to fall victim to the shutdown is the USDA's monthly Wasde crop production report, set for Oct. 11, which affects prices of grains and other agricultural commodities around the world.
- Analysts say concerns over a delay could lead to additional short-covering as speculative shorts look to take risk off the table; once the USDA resumes operations, a torrent of backlogged data could trigger a highly volatile reaction.
- ETFs: MOO, CROP, PAGG, VEGI, JJG, GRU, CORN, WEAT, SOYB, COW, UBC, JJA, RJA, AGF, DBA, FUD, UAG, DAG, AGA, ADZ, JJS, TAGS, USAG, RGRA.
Sep. 30, 2013, 3:49 PM
- Corn (CORN -2.4%) and Soybeans (SOYB -3.2%) tumble - with corn hitting a 3-year low - after the USDA reports estimated corn stocks of 824M bushels, off 17% from a year ago, but far higher than trade estimates for 687M. Bean stocks are estimated at 141M bushels, also off 17% from a year ago, but 13% above estimates. Stocks still remain low, but these are old crop numbers, and forecasters are looking forward to a big crop this fall.
- Wheat (WEAT -2.7%) stocks of 1.85B bushels were slightly below expectations.
- Lower-than-expected feed usage and export demand were behind the big corn number - high prices had pig farmers substituting corn for wheat.
- Relevant grain ETFs: JJA, RJA, AGF, DBA, FUD, UAG, DAG, AGA, ADZ, JJS, TAGS, USAG, RGRA, JJG, GRU.
Sep. 12, 2013, 1:07 PM
- December Corn slides nearly 3% after the USDA revises upward its estimate for ending stocks to 1.855B bushels from last month's 1.837B. Trade forecasts were for 1.739B. Production is lifted to 13.843B bushels from 13.763B last month and trade estimates of 13.641B. The average yield is expected at 155.3 bushels/acre vs. 123.4 last year.
- Beans go green, however, as the USDA cuts it estimate for yields across the Midwest. The agency sees production at 3.149B bushels and ending stocks of 150M after cutting export demand by 20M bushels. "Leaves trade nervous," tweets Arlan Suderman of Water Street Solutions. "USDA too conservative on demand."
- Wheat's reverses an early loss to go flat even as the USDA revises higher its forecast of ending stocks to 561M bushels from 551M.
- Deere (DE -1.1%) got knee-jerked for a few cents on the news release, but looks to be in the process of bouncing back.
- CORN -2.7%.
- JJG, GRU, SOYB, WEAT.
Aug. 26, 2013, 8:05 AM
- Soybeans lead big gains in the grains after the Pro Farmer tour suggests a harvest lower than the USDA prediction and DTN forecasts more hot, dry weather in the Midwest for the next 7-10 days.
- November beans +3.9%, December corn +3.6%, December wheat +1.5%.
- "The market's increasingly getting a bit nervous about the soybean crop," says an agricultural economist with ANZ.
- ETFs of interest: CORN, SOYB, WEAT. JJG, GRU.
Aug. 12, 2013, 12:26 PM
- The grain pits party after the USDA lowers its corn production estimate to 13.76B bushels - still a whopper of a number, but off from 13.95B in July. Ending stocks are cut to 1.837B bushels.
- Bean production is cut to 3.255B bushels from 3.42B as acres planted are cut 500K and yield is lowered to 1.9 bushels/acre.
- No change is made to the wheat production estimate, but 25M bushels of extra exports cuts ending stocks by the same amount.
- December corn erases a sizable early loss, now up $0.15 to $4.69/bushel. CORN +1.5%.
- SOYB +3.4%, WEAT +0.3%.
- Grain ETFs: JJG +1.8%, GRU +2.5%.
- Other related: JJA, RJA, AGF, DBA, FUD, UAG, DAG, AGA, ADZ, JJS, TAGS, USAG, RGRA.
Aug. 12, 2013, 3:29 AM
- This time last year, the U.S. was suffering from a severe drought that hit production and sent corn prices (CORN) to a record high of $8.31 a bushel.
- Now, the harvest is expected to rise to at least 14M bushels from 10.8M in 2012, causing prices to sink to $4.65 a bushel. Soybean is down by over 20% from a year ago.
- While the drop in prices - which is forecast to continue - is hurting farmers, it's providing relief for meat producers and other food companies.
- Relevant livestock ETFs include COW and UBC.
Jun. 28, 2013, 1:00 PMCorn (CORN -3.9%) crumbles after the USDA estimates farmers planted 97.379M acres - the most since 1936 and far ahead of estimates for just 95.431M acres. The number of acres to be harvested, however, fell to 89.135M from 89.5M projected 2 weeks ago, and stocks of 2.764B bushels are below expectations of 2.845B. Bean (SOYB -0.5%) acreage is estimated at about an inline 77.28M acres - the most ever. DBA -1%. | 10 Comments
Jun. 12, 2013, 12:19 PMCorn (CORN -1.8%) gives up early gains and turns sharply lower after the USDA estimates 2013/14 ending stocks of 151.8M tons, above the trade estimate of 149.6M. The USDA cut its yield projection by 1.5 bushels to 156.5 bushels/acre, but lower feed usage and no reduction in planted acreage (despite spring delays) has stocks higher. Tyson (TSN +0.9%) and Pilgrim's Pride (PPC +1.9%) cheer the news. The data was bearish for beans (SOYB -1.8%) as well. Grains ETF (JJG -1.3%). | Comment!
Jun. 3, 2013, 1:13 PMThe price of corn sees little comfort from Morgan Stanley's estimate of planted acreage coming in at 93.5M acres, well below the USDA's 97.3M forecast. Wet weather has slowed fieldwork, says Morgan, also projecting production of 13.3B bushels vs. the USDA at 14.14B. That corn-planting got off to a slow start is hardly new news and the USDA will update planting figures later today. CORN -1.2%. | Comment!
May. 21, 2013, 10:24 PMDon't say Goldman didn't warn you (I, II). Corn (CORN) prices fell Tuesday to multi-week lows after the Department of Agriculture reported a 43 percentage point increase from last week to this week in the amount of the corn crop planted, bringing the total to 71% compared to just 28% a week ago. | Comment!
May. 17, 2013, 11:01 AMGoldman's Tuesday bear call on agricultural commodities has implications for Deere (DE -2.7%) which gets a downgrade to Sell from Neutral. Analyst Jerry Revich says "recovering commodity inventories point to lower U.S. farm income and capex." As recently bearish Barron's notes (channeling Wells Fargo's Andrew Casey) "as goes the North American corn crop, so goes DE's stock price." For their part, GS says only a "major weather shock" could keep corn crop (CORN +0.1%) prices "near their current levels." Price target: $85 from $98. | Comment!
CORN vs. ETF Alternatives
The investment objective of the Fund is to have the daily changes in percentage terms of the Shares’ net asset value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for corn (“Corn Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”), specifically (1) the second-to-expire CBOT Corn Futures Contract, weighted 35%, (2) the third-to-expire CBOT Corn Futures Contract, weighted 30%, and (3) the CBOT Corn Futures Contract expiring in the December following the expiration month of the third-to-expire contract, weighted 35%, less the Fund’s expenses. (This weighted average of the three referenced Corn Futures Contracts is referred to herein as the “Benchmark,” and the three Corn Futures Contracts that at any given time make up the Benchmark are referred to herein as the “Benchmark Component Futures Contracts.
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