Chicago Board of Trade Market News
Outlook: Today’s USDA Acreage report surprised the market by reporting larger-than-expected corn acreage, while the Grain Stocks report supplied confirmation that high cash basis levels are presently justified. Corn acreage was reported as 97.38 million acres. This number is not only substantially larger than the average estimate of trade analysts, which was 95.31 million acres, but also slightly larger than the March estimate of 97.28 million acres. The combination of the large acreage and current non-threatening weather patterns pressed the new crop December contract, while the July contract was elevated by the contents of the Grain Stocks report.
The December contract is unlikely to go far below $5.00 per bushel prior to pollination. Additionally, the July contract (and eventually the September contract) is likely to add some support. If growing conditions remain favorable in the U.S., China and the Black Sea regions, then a further decline in prices could take place around mid-August.