Chicago Board of Trade Market News
Outlook: USDA held its annual Outlook Conference where it forecasts crops for the year ahead. The agency expects corn production area in the U.S. to expand to 90 million acres (versus 88 million last year), partially offset by a 1.7-million-acre decline in minor feed grain production area, and resulting in a season average corn price of $3.45/bushel. Global corn production will outstrip demand for the fifth year in a row, though ending stocks remain 40 percent below their peak in the late 1990s.
On the bullish side, U.S. corn exports are beating expectations (up 20 percent last week over the four-week average) and should remain strong for a few more weeks. Argentine suppliers are slow to reduce premiums despite cheaper feed wheat in the market. Weather is the only foreseeable change variable and extraordinarily warm temperatures in the U.S. upper Midwest poses a risk to an emerging winter wheat crop should a cold snap return. Otherwise, the world is awash in wheat, so much so that Black Sea feed wheat is being offered into the North Africa market at parity to corn, giving it a marketing edge. In fact, the situation has made popular a wheat/corn spread in the future for those recognizing that wheat has to get cheap enough to sell into feed demand.
Monday, February 29 is first notice day for deliveries against the March futures contract.