Market Perspectives February 22, 2018

Outlook: USDA announced its forecast for 2018 U.S. corn acreage on Thursday: 90.0 million acres. The latest forecast is 200,000 acres less than the agency predicted in the February WASDE. The move, assuming USDA’s February WASDE yield projection of 176.6 bushels/acre, would imply a 33-million-bushel decrease in production, pushing production to 14.601 billion bushels. 

Market Perspectives February 15, 2018

Outlook: The rally in March corn futures has stalled somewhat since last week, but the market’s ability to maintain current prices is a sign of strength as well. The ongoing drought in Argentina is the biggest factor directly impacting the corn market, but dryness across the southern U.S. is also concerning. Additionally, the corn market has benefited from spillover buying in the wheat and soybean markets, which are arguably more impacted by the Argentina/southern U.S. weather dynamics than corn. 

Market Perspectives February 8, 2018

Outlook: USDA surprised the markets today with significant revisions to its 2017/18 corn U.S. corn balance sheet. Most notably, the agency reduced its ending stocks forecast by 125 million bushels to 2.352 billion. Corn exports were increased by 125 million bushels, which drove the ending stocks reduction, as the agency sees U.S. corn’s competitiveness (currently the cheapest FOB prices in the world) as encouraging U.S. exports. USDA increased the season-average corn price 5 cents to $3.30/bushel.

Market Perspectives February 1, 2018

Outlook: March corn gained 5 ¼ cents this week in what, for the current environment, amounts to a sizeable rally. The market found its way higher this week, fueled by dry weather in Argentina, production cuts around the world, and spillover buying from other markets. The fundamentals are hardly bullish yet, but modest production cuts may lift the market from its recent malaise. 

Market Perspectives January 25, 2018

Outlook: Activity in March corn this week featured the same slow, rangebound trading up until Wednesday. Wednesday’s trading featured a 5-cent leap higher which equaled an upside breakout from March corn’s months-long trading range. Buying in wheat and the soy complex motivated corn’s move higher, along with deteriorating prospects for the South African and Argentine corn crops. 

Market Perspectives January 18, 2018

Outlook: Last Friday’s WASDE was certainly bearish the corn market. The USDA increased 2017/18 corn production by 26 million bushels to 14.604 billion. The additional production came on the back of a decrease in harvested area (from 83.1 million acres to 82.7) and a 1.1 bushel/acre increase in yield (from 175.4 to 176.5). Feed and residual use was decreased 25 million bushels and no other consumption variables were increased in the balance sheet. The combination of these factors increased ending stocks 40 million bushels (2 percent) to 2.477 billion. 

Market Perspectives January 11, 2018

Outlook: March corn is trading sideways in a comfortable range near $3.50, waiting for tomorrow’s USDA reports. Tomorrow’s reports, however, aren’t expected to produce major changes to the U.S. or world balance sheets. If that is the case, corn will be relegated to continue its slow, sideways trade until U.S. planting prospects are better determined. 

Market Perspectives January 4, 2018

Outlook: March corn refuses to leave the safety of its narrow range around $3.50/bushel. Two holiday-shortened trading weeks in a row, combined with little fresh news, have left the contract decidedly range bound. The holidays created a lack of fundamental news and next week’s January WASDE isn’t likely to show major changes to the U.S. corn balance sheet. Until some new information is gathered, corn seems relegated to its current sideways pattern. 

Market Perspectives December 21, 2017

Outlook: March corn has been in a consolidation pattern around the $3.50 mark and today was no exception. The contract finished 2 cents higher and just above $3.51 as traders perceive such prices to be near the market’s fair value. Without much bullish or bearish news to push trading one way or another, trading activity continues to lighten ahead of the holidays. There is some position squaring ahead of the holidays with shorts seemingly always nervous about leaving their position on over the Christmas/New Year period. 

Market Perspectives December 14, 2017

Outlook: Corn prices remain on the defensive after a neutral December WASDE report. No major changes were made to the U.S. corn balance sheet in this week’s report and, except for dry weather in Argentina, all other fundamentals remain bearish. Some technical indicators and recent fund activity may give way to a mild rally, but the long-term trend for corn is still down.