Chicago Board of Trade Market News
Outlook: USDA’s June WASDE report was slightly bullish for corn as it reduced ending supplies for both the old crop (-95 million bushels) and new crop (-145 million bushels). Despite the better than previously expected corn exports, 2016/17 ending stocks will be ample (2 billion bushels/50 MMT), assuming production is not hurt.
A record long rally in the soybean market has the trade expecting USDA’s 30 June planted acreage report to show fewer corn acres (approximately 1 million less) and more planted to soybeans. Weather is the main story between now and the 30 June quarterly stocks and planted acreage reports. Current weather conditions are very good; the forecast not so much. The models are having trouble with consistency but expectations are that it will be much dryer and warmer in July and August, which poses a threat. The corn market is already up nearly 20 percent over 1 March and may see more weather risk premiums being added.
April trade data shows that China has returned to the market. U.S. corn exports to China were down from March but at 65,098 MT, it was the second highest volume for the month of April since 2011, surpassed only by the 74,943 MT in April 2012. U.S. sorghum exports to China that month hit 559,663 MT, a 12.5 percent improvement over the previous month, and the FOB port of departure value of $200.77/MT was 22.8 percent higher. Sorghum appears headed toward a solid year in export volume. Meanwhile, U.S. hay exports to China hit their second highest volume for the month since 2010 and are headed for a record year.
However, competition in the export market is about to increase as Argentine farmers have completed their soybean harvest and have now shifted all of their equipment over to corn, which has begun to arrive at ports with greater volume.