Corn Traders Await Harvest, Argentine Runoff
Today’s Spotlight Market
Corn futures have been trading in a relatively tight range, as the US harvest ramps up.? According to estimates, the US harvest is roughly ? complete at the present time, and prices could find themselves under pressure from strong yields in Corn and Soybeans.? In Argentina, traders await the November runoff election between Mauricio Macri and Daniel Scioli, who was expected to win by a sizable margin.? Macri is expected to push for the elimination of export taxes on grains, which could mean more supply available outside of the country.? This would appear to be bearish for Corn prices, at least on the surface, however the center right politician could also loosen some of the country?s currency controls, which could drive currency volatility.
Fundamentals
As of yesterday morning, Corn is 75-76% harvested, with Illinois, Kansas and Missouri nearing completion of their respective harvests.? Weather conditions have been cooperative with farmers, and there is not expected to be any severe weather which would delay the harvest.? Yields are expected to be a healthy 168 bushels per acre, which is behind last year?s record yield of 171 bushels per acre, but still well above norms.? Indiana and Ohio have both seen a 1% improvement in crops rated good-to-excellent.? While the market may get a little post-harvest boost, the fundamentals for Corn appear to have a bearish tilt at the moment.? Argentine farmers may feel as though they are winners, regardless of who wins the November presidential runoff election.? President Cristina Fernandez de Kirchner has frequently clashed with farmers since being elected.? Macri would be the ideal choice for farmers, as he would make a push to reduce or eliminate export taxes on grains.? For traders, his election would be somewhat of a wildcard due to the possibility that currencies could experience extreme volatility.
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