Chicago Board of Trade Market News
Outlook: Corn prices are being supported by an array of data that was released this past week. Data relating to U.S. corn condition was released on Monday in USDA’s Crop Progress report. This data showed a further 3 percent decline in the good-to-excellent categories for average U.S. corn. The 68 percent rating this season is below last year’s rating of 75 percent. The implication of potentially lower yields placed more emphasis upon the data for acreage and stocks that was released the next day.
Acreage data indicated that U.S. farmers planted 88.9 million acres of corn this summer. That amount is 2 percent below the year-ago level and it was below the average of what market analysts were expecting. The 24 percent increase in sorghum acreage to 8.84 million acres did not counteract concerns about the prospects of reduced corn production.
Corn stocks data showed that total U.S. supplies on June 1 were 15 percent large than the year-ago level, but the total 4.45 billion bushels in storage was below the average of market expectation of 4.512 billion bushels. Furthermore, the lower stocks level implied that corn usage during the March to May period was 3.3 billion bushels (bb.), which is above the year ago usage during that same period of 3.16 bb. This data largely alleviated concerns about potentially weaker demand due to factors such as the culling of 50 million poultry animals due to bird flu.
The composite of USDA data enabled corn the price of futures contracts to rebound this week that offer the majority of U.S. farmers an ability to secure profitable returns on their remaining old-crop corn stocks. Other global feed grain producers are expected to also increase their marketing rates.