Chicago Board of Trade Market News

Outlook: March corn futures are in a bearish trend and can’t seem to find much bullish news. U.S. exports are lagging both last year’s pace and that needed to reach USDA’s projections. Meanwhile, USDA issued an early 2018 corn market forecast that kept production near this year’s level. The story continues to be that the world is awash in corn with few prospects for boosting demand or cutting supplies. At this point, the best chances for a bullish corn story are from a weather issue in South America or for a demand-boosting policy intervention by a major exporting or importing country. 

USDA’s long-term projections were released this week and featured 2018 projections of 91 million acres planted to corn, and the same amount planted to soybeans. USDA’s 2018 corn production figure came in at 14.5 billion bushels, essentially equal to this year’s production. The report was largely bearish the corn market, but traders seldom put much stock in this report’s figures. The true planted area will be determined next spring, and projections at this point are just projections. 

U.S. corn exports are behind last year, reaching 36 percent of what was exported by the end of November 2016. Today’s Export Sales report included 23.6 million bushels of corn sold (behind the 26.4 million needed this week) and 25.6 million bushels exported (behind the 39.3 million needed). YTD exports are only 15 percent of USDA’s projected total, even though 21 percent of the marketing year has elapsed. USDA will likely lower its export forecast in future WASDE reports. 

The U.S. corn harvest continues to lag last year’s pace, potentially putting some of the crop at risk. USDA reported 95 percent of the crop was harvested as of last week, behind last year’s 98 percent pace. If USDA’s projections are correct, this leaves approximately 730 million bushels still standing in the field. Most of this crop is in the Eastern Corn Belt, which experienced a wet fall this year. The weather is forecast to dry out some this week, allowing farmers to harvest that last 5 percent. 

From a technical perspective, March corn has put in new lows and is following bearish moving averages. However, the contract seems to have found support at $3.50 and is rebounding from that point. With funds holding large short positions and corn becoming cheap by commercial standards, there are low odds of the market putting in significant new lows. Conversely, there is little news to spark any rally in the market and choppy trading is expected going forward.