Chicago Board of Trade Market News
Outlook: Corn contracts started off the week in decline as short traders attempted to trigger a collapse by punching through the prior June 1 lows in hopes of fracturing support. That did not happen and it challenged the resolve of bearish traders as they bought back some of their short positions, which caused prices to work about 10 cent higher over the next couple of days. At that point, bearish and bullish traders seemed to be in a standoff as they waited on the release of future price influencing data.
The first price influencing data to be released will likely be USDA’s Crop Condition ratings on Monday. Those conditions are expected to show another limited 1-3 percent decline for both corn and soybeans. Average U.S. corn conditions are favorable but weekly repetitive declines is not a development that instills confidence to continue selling at current price levels until more definitive data is released. Market participants will receive more substantive data on June 30.
USDA will update their acreage estimates for corn, sorghum, barley and oats in the Acreage report. The quarterly Grain Stocks report will also be released on that same day and it will give a snapshot of total U.S. grains stocks on June 1. As well, USDA will release their Feed Outlook report and it will discuss the U.S. feed supplies and recent consumption patterns. Shortly thereafter, USDA will release their first survey based yield and production estimates for barley and oats on July 10 Crop Production report. One month later, USDA will release yield and production estimates for corn and sorghum in the August 12 Crop Production report. This composite of summer reports from USDA consistently affects U.S. and global feed grain prices.
There is no reason to expect USDA’s data to be consistently bullish or bearish. For example, it is entirely possible that the Acreage report could be considered bullish for corn prices while the data within the Stocks report is considered more bearish for nearby contract corn contracts. Whatever the actual outcome, the outlook is that the uncertainty is presently a larger threat for bearish traders at current price levels and so an additional reduction in their positions is anticipated prior to June 30, and that action should enable corn contract prices to strength before month’s end.