Chicago Board of Trade Market News
Outlook: USDA released the June WASDE this week and the report’s data contained no surprises for feed grains. Beginning stocks estimates for the 2015/16 were adjusted higher for U.S. corn, oats and barley: corn beginning stocks increased by 25 million bushels, oat’s increased 2 million bushels and barley beginning stocks were reduced 1 million bushels. The reason that corn beginning stocks were adjusted higher is because the estimate for ethanol usage of corn in the current 2014/15 crop year was reduced by 25 million bushels. That reduction is then carried over into the corn balance sheet for the 2015/16 season, which will begin on September 1. USDA predicts that none of these small adjustments will have any influence upon farm prices.
Near-term feed grain prices could be substantially influenced by the contents within USDA’s Acreage report that will be released on June 30. There is a general expectation among market participants that U.S. corn acreage will decline in this upcoming report. Therefore, those traders who currently hold large short positions in corn futures, which are trading near contract lows, may be particularly reluctant to continue selling before acreage and crop conditions becomes more certain. The outlook is that corn futures will become increasingly volatile during next two weeks and likely work somewhat higher as various traders reduce the size of their short positions.