Chicago Board of Trade Market News
Outlook: The week’s most notable news for the corn market came Thursday as USDA announced the sale of 1.3 MMT of corn to Mexico. The sale included 845,000 MT during the 2017/18 marketing year and 510,000 MT for the 2018/19 marketing year. The report ranked #10 on USDA’s Top 10 Daily Export Sales report, with other sales to Mexico holding three of the top ten spots.
Beyond the large sale to Mexico, there was little to spark much interest in corn futures this week. Prices approached 2017 lows but did not fall much beyond previously established lows. Commercial buying became prevalent as corn neared its lows, which sent the market 5 cents higher over Wednesday and Thursday. Funds have not been influential in the market this week, paring back some short positions but lacking any reason to increase market exposure.
Ethanol has been a bright spot for corn this marketing year. Year-to-date production is up 4.1 percent, which is helping work off some of this year’s big supply. DDGS prices have regained early-2017 strength, leaving ethanol producers with breakeven or above margins.
From a technical standpoint, December corn is rangebound for yet another week. Fund activity is minimal and commercial firms are buying when prices are “cheap”. January soybean futures are presenting an interesting wedge formation, which is often followed by a sharp up- or downward breakout. Should January soybean futures gain momentum and move strongly in one direction, that movement could create sympathetic buying/selling in corn futures. Corn in and of itself looks relatively risk-free for now, but other markets could exert influence soon.