Strong Corn Export Demand Bites into Ethanol Margins

Corn prices led grains lower last week, falling 1.8 percent for the March futures contract and two percent for May.  Corn values have been trending lower after the Commitment of Traders report last Tuesday.  The market set up a wide-ranging downside reversal indication last week with prices trading well above and below the prior week’s highs and lows and settling near the lows for the week.  Managed money was not buying into the downside scenario, as traders pushed net long holdings four percent higher to 358,807 contracts, a four-week high.  China remains a firm buyer of corn this marketing year.  Corn exports are 142 percent above last marketing year through the same time period.  High corn prices and lower gasoline demand have been negatively impacting ethanol margins, which has led to lower DDGS supply.  DDGS demand remains strong,…