Market Perspectives April 25, 2014

Chicago Board of Trade Market News

Outlook: The nearby May corn contract began this week by continuing to trend lower but the prospects of a return of cool temperatures and a fruther decline in winter wheat conditions allowed the May contract to rebound and return above $5.00 per bushel. Market participants presently seem to have limited interest in driving corn contracts much above the $5.00 level because there is still ample time to get a majority of the crop planted by May 15. However, attitudes are expected to become more bullish if weather forecasts remain cool beyond the end of next week.

Beyond planting weather in the U.S. Corn Belt, other lessor factors that can influence corn contract prices in the next few weeks are the expiration of the May corn contract, the importation of soy products from South America into the United States to help offset tight domestic meal stocks, the normal seasonal prices action as winter wheat harvest approaches, increasing South American grain exports and market reactions to tensions between Ukraine and Russia.

The diverse combination of price influencing factors could result in a roller-coast ride within an expanding horizontal range for corn contracts during the next month. It is entirely possible that corn contracts could be supported to higher next week, down the proceeding couple of weeks and then once again supported prior to pollination. Speculators, who already hold a sizable long position in corn contracts, are likely to simultaneously decide to either add to their length or to exit by selling. Either way, their combined actions are anticipated to influence the mid-summer price of corn contracts.