Chicago Board of Trade Market News
Outlook: March corn futures have had a net gain of a whole penny over the past five days of trading. The funds have been approaching record short positions in corn and wheat and USDA’s WASDE report was not expected to alter the bearish mood – until it did. USDA reported lower harvested acres, a lower national yield and consequently lower 2015 corn production than in its December report. The reductions were small, but if anything they were expected to go the other way if at all. Still, the close on Tuesday at 5 cents higher was off the day’s highs of being up 12-13 cents. Moreover, open interest has grown at a greater pace than short covering, indicating that the mood is still bearish.
A large 4 million bushel sale of corn to Mexico helped close out the week. However, strong competition in the corn export market from South America and Ukraine will continue, making U.S. export sales hard fought. The market itself grew tighter as USDA reduced its projection for global corn consumption by 3 MMT.
China holds more than half of the world’s 208.9 MMT of corn ending stocks for 2015/16 and its domestic corn prices had been holding steady, but they fell last week to an average of $312.30/MT.