Additional short covering and a general lack of bearish input sent corn futures to gains of 4-5 cents. It’s likely that managed funds had established a new record short position as of this AM, and with competing feedgrain prices rising more questions are being asked about new crop US acreage. Indeed, the corn market in the last 12 months has performed much worse than oats, sorghum, barley, cotton and spring wheat, and it’s logical that the US may lose upwards of 1-2 Mil Acres this spring. An intermediate bottom was likely scored just after NASS’s Jan report.
Ethanol margins have rebounded quickly. Crude & gasoline prices this evening are still perched at at multi-year highs, and Wednesday’s EIA report is fully expected to include a bounce in ethanol production. Brazilian ethanol’s premium to US Gulf origin also continues to rally. Until more is known about Brazil’s weather pattern this spring, spot corn is expected in a range of $3.45-3.65. No sales are advised.