The WASDE report was pretty much as expected with the USDA dropping 15/16 carryout to 1708 with a 100mln increase in US exports with Brazil’s export/production issues. This, combined with a drier forecast led the Friday’s trade to have a 16 cent range in the CZ, but settling on the lower end at $4.30 as we are still looking at record production number. But the real news this morning is as of the break corn is up 13.75 in the CZ contract as we come back from weekend the southern plains have an extended dry forecast. The trade continues to build weather premium, the CFTC report on Friday reported that the spec/funds where actually long 200k+ contracts and the trade has no issue adding on to this position. But with many thinking out loud that it might a bit early that the trade might be putting too much into this dry weather models and at the first sign of a large crop we will see this thing go back into the low 3 range. CN/CU spread has widen out to 5 on the cash movement off flat price rally. CN has support at $4.20 then resistance at $4.39.
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