Chicago Board of Trade Market News
Outlook: Corn futures are 6 ¼ cents (1.3 percent) lower this week after the December WASDE issued a neutral outlook for world feed grains and Brazil’s weather outlook turned more favorable. Since the December WASDE, corn futures have been mostly locked in a sideways trading pattern with little directional conviction. Seasonal trends suggest the market should see more strength heading into the new year, especially with U.S. corn export demand picking up.
USDA made only two adjustments to the U.S. 2023/24 corn balance sheet in the December WASDE and issued minor revisions for the world corn outlook. For the U.S., the agency increased its forecast of U.S. exports by 640,000 MT (25 million bushels) based on export statistics so far this year. That increase in demand lowered projected ending stocks by an equal amount, and the U.S. 2023/24 carry out is now forecast at 54.13 MMT (2.131 billion bushels). That figure is down 1.2 percent from the November forecast but up 56 percent year-over-year. USDA did not alter its outlook for the Brazilian or Argentine corn crops but did raise its forecast of 2023/24 world production by 1.2 MMT to 1,222 MMT based on larger crops in Russia, Ukraine, and the EU. World corn exports were revised 1.8 MMT higher and feed and residual and food, seed, and industrial (FSI) use both grew fractionally as well. World 2023/24 ending stocks grew 228,000 MT to 315,216 and are up 5 percent from the prior year.
U.S. corn gross export sales were up from the prior week at 1.512 MMT but exports shrank slightly to 0.851 MMT. YTD exports are up 32 percent, however, at 9.55 MMT and YTD bookings are up 36 percent at 27.166 MMT, thanks largely to robust demand from Mexico. U.S. sorghum exports were up 169 percent last week to 340 KMT and put YTD bookings at 3.665 MMT.
Technically, March corn futures are continuing their range-bound and sideways trade from support at $4.70 ½ (the 29 November daily low) to resistance at $4.96-5.00. Funds have covered some of their positions but still retain the largest short position for mid-December in the past five years. Strong export and domestic demand should keep values from pushing much lower despite funds’ bearish position, especially as U.S. corn remains highly competitive on the world market. This, combined with corn futures’ seasonal tendency to rally from November/December into and through the first quarter of the new year, should create a positive outlook for prices going forward.
