Chicago Board of Trade Market News
Outlook: Traders had been lamenting the lack of volatility on which to make profits, but that changed this week as a flood of fresh capital poured into the market. The fresh speculative money was the story of the week as contracts were pushed higher. By Wednesday, the July contract was trading above its 20- and 40-day moving averages. There were some fundamentals underlying the shift, including adverse weather in South America (dryness in central Brazil; wetness in Argentina) and renewed demand from China, but it was also driven by sheer money flow. That put the market into a position for a correction.
Farmers sold heavily into the rally, both old and new crops. Soybean prices pushed far enough higher that many farmers began talking about ignoring what they’d said to USDA’s surveyors about their planting intentions and to instead plant more soybeans this year.
Nonetheless, U.S. corn planting progress was at 4 percent this past week, exceeding expectations and the forecast is that a lot of corn will get planted over the next 10 to 14 days. Technology enables American corn farmers to plant nearly 40 percent of their crop in a single week.
USDA’s April WASDE report provided no dramatic changes to the picture. U.S. corn stocks were raised less than one percent above the trade’s expectation, with a similar small change made to world surplus stocks. Corn for ethanol grinding this marketing year was raised by 25 million bushels, offset by a 50-million-bushel decline in the projected feed/residual use of corn.
U.S. weekly corn export sales were slightly above expectations for the current crop at 1.135 MMT, and in the middle of trade estimates for new crop at 111,000 MT.