Chicago Board of Trade Market News
Outlook: USDA’s May WASDE report was expected to be mostly bearish, and while it cannot be called bullish for corn it was less bearish than expected. The result was a 3.2 percent price spike on Tuesday. USDA projects the 2016/17 corn carryout to be 350 million bushels larger than last year’s, but that turned out to be over 100 million bushels less than expected. And while world corn production this year will be substantially larger than last year, so will corn use, leaving ending stocks roughly the same. That said, it is still a 2.2-billion-bushel carryout and the burden remains on the bulls. One demand trigger that could get pulled is the fact that U.S. corn at the gulf is notably cheaper than at the ports in Brazil.
The futures market is experiencing large volumes and large open interest. Attention will now shift toward spring planting and the accompanying weather outlook.
U.S. corn remains competitive on the spot market. Both farmers and exporters are taking a beating in Argentina as weather delayed harvesting and thus delivery is imposing increased demurrage costs and late delivery penalties. Black Sea feed wheat is attracting feed interest, as is the HRW cash market. Wheat will grow more competitive for feed as the weeks go by.