Chicago Board of Trade Market News
Outlook: USDA published their April WASDE report this week and it held no significant price influencing surprises. In summary, the estimate for U.S. corn ending stocks increased from 1.777 to 1.827 billion bushels for the present 2014/15 season. That ending stocks level remains well under 2 billion bushels and cash corn prices are presently below $4.00 per bushel through calendar year 2015. The onus is not on bullish traders to prove their case before feed grain prices can rally higher when the May corn contract is trading around $3.75 per bushel and cash corn is trading 20 cents lower. Rather, the seemingly far more tentative assumption is that future circumstances will weigh on and further depress prices from present levels.
USDA data implied that Chinese demand for U.S. sorghum will remain strong throughout the present season. The forecast for China’s feed use of sorghum was increased 1.5 million metric tons. This increased export demand was partly offset by decreased sorghum use. USDA is also expecting that an early sorghum harvest in Texas will supplement this season’s strong demand and maintain an acceptable ending stocks level.
The estimate for Mexican demand of U.S. corn was reduced as it appears that favorable growing conditions will allow for an abundant winter crop. However, that reduced Mexican demand was offset by higher imports from other destinations such as Indonesia, China, Iran, Algeria, Peru and Columbia. Such growing global demand necessitates the United States produce another bumper crop in order for feed grain prices to remain capped a present levels.