Chicago Board of Trade Market News
Outlook: Corn contracts began the week trading down 4- 5 cents due to improved rain forecasts ensuring that there would be sufficient moisture to meet the final states of a maturing crop. However, that ample moisture turned into excessive moisture in much of the western Corn-Belt. So, weather was not a catalyst to drive feed grain prices either higher or lower. A number of nations are presently shopping around to make sizable purchases of corn, but foreign prices are undercutting the price of U.S. corn at the Gulf. Thus, exports are not situated well to act as a catalyst to drive prices either higher or lower. Nor is domestic demand currently ready to influence prices since the prospect of abundant supplies is creating limited interest in extending coverage. As a result, the December corn contract has spent more than a month is a narrow trading range.
Open interest has been growing as corn as traders have been building sizable offsetting positions in corn contracts this past month. Corn has been able to remain in a narrow range because the two opposing sides are rather evenly balanced. The outlook is that this offsetting condition will not remain indefinite and one side will momentarily give way to allow for a sharp and limited price move. However, giving way and completely capitulating are not the same thing. As a result, the outlook is that volatility in corn contracts is likely to intensify from the present mundane levels going into calendar year 2015, but the prospects are not good during the next quarter for the occurrence of a single decisive move in one direction.