Chicago Board of Trade Market News
Outlook: There is a lot of feed available in the market confronting low demand but Argentina still managed three MMT in sales, mostly to Asian markets. The current bearish prices emanating from the supply and demand situation will have ripple effects going forward. Argentina’s corn planted area is expected to decline by 16 percent versus 2015 but USDA’s chief economist said this week that he expects U.S. corn planted area to expand by two million acres this year over last. Meanwhile, Argentina’s barley crop was planted on 1.2 million hectares, a 40 percent increase, but with a large amount failing to make malting quality and thus destined for the feed market.
The market is likely to remain erratic until next week’s (January 12) WASDE release. There will be more short-covering as insurance but do not be fooled, the thrust of this market remains short and bearish. Abundant supplies (globally), macroeconomic worries (China) and geopolitical risks (Middle East) are weighing heavily on commodities and equities. However, it is the macroeconomic situation that is most important since it most impacts the currently missing component: demand. China’s Business News today reported China imported 113 MMT of food products in the first 11 months of CY 2015. That was an increase of 27.3 percent over the same period of 2014.