Chicago Board of Trade Market News
Outlook:USDA’s November data was not as bearish as the market had expectated and there is no justification for a continued sell-off in U.S. corn prices. The average U.S. corn yield increased from the September estimate of 155.3 bushels to 160.4 bushels per acre. Offsetting much of that increase was a reduction in harvested acres from 89.1 to 87.2 million acres. The result is that production only increased by 146 million bushels. Beginning stocks for this season were increased by 163 million bushels, but that was offset by a 175 million bushel increase in exports and 100 million bushel increase in feed consumption. The final result is that corn ending stocks for the 2013/14 season were increased by 32 million bushels, and such a limited increase does not justify further price erosion.
A large number of speculative traders seem to have already determined in their minds that corn contracts are destined go lower. There seemed to almost be an attempt to muscle the nearby December contract lower, but end-users embraced their selling at present price levels and the daily trading volume in the December contract exploded to almost 350,000 contracts. It will be interesting to see how speculative traders attempt to exit their record short position in the December contract over the next month.