Chicago Board of Trade Market News
Outlook: This past week, bullish news came from USDA’s weekly export sales report which estimated 58.9 million bushels of corn were exported last week. The figure came with a modestly disappointing sales figure of 28 million bushels, 0.8 of which were from the 2017/18 crop. Typically, export sales start to slump during the spring and steadily fall off into the summer. Last year, however, tight stocks in Brazil left U.S. exports robust through much of the spring and summer. This year is more likely to follow the traditional pattern, given the generally good condition of Brazil’s crop and the country’s expected production. So far, YTD exports are up 68 percent this year and bookings (exports plus unshipped sales) are up 57 percent YTD.
From a technical perspective, May corn remains in its long, shallow uptrend and shows few signs of reversing course. The 100-day moving average has proven to be a strong support point since early January and major support is noted there, at $3.66. Resistance lies at $3.87, the February 16 daily high, and strong fundamental news will be required to lift the market above this point. A sentiment of weakness is prevalent in the cash market with interior basis levels widening and cash prices retreating modestly. The March futures contract received 118 deliveries yesterday, illustrating the weak cash situation. Looking forward, the May contract likely has a few days of upward momentum left in its system. So far this year, May corn has responded well to slow stochastic indicators, and Monday’s indication of oversold conditions gave way to Tuesday’s rally. Look for the market to trade higher for the next few days before bulls run out of news and commercial selling kicks in.