Corn bulls continue to point towards strong export and ethanol demand. There’s also continued uncertainty surrounding total South American production. Most inside the trade seem to be thinking the USDA will trim their Argentine estimate, by how much who knows? Keep in mind, Informa recently cut its Argentine corn production estimate to 37 MMTs vs. the USDAs current projection of 42 MMTs. There seems to also be some debate surrounding the USDAs current estimate for Brazil. I personally side with the bulls, who seem to believe the USDA is currently a bit too high with their forecast. I’m thinking Brazil’s second-crop acres could disappoint with not as many acres planted. Bears continue to focus on uncertainty surrounding NAFTA and other trade renegotiations. The latest headlines about China launching an investigation into U.S. sorghum being imported into their country is making the bulls in the market a bit more nervous. The fear is since we export a sizable amount of U.S. sorghum to China, if it starts to back up into the U.S. it could start competing more aggressively with other U.S. feed stock, specifically competing with corn used for feed. From what we are hearing, the sorghum investigation will go until February of next year and could be extended even further. I’m personally hoping the lack of U.S. sorghum into the Chinese market will force China to use more of their domestic corn, which might actually be their play… I’m staying a longer-term conservative bull.

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