Chicago Board of Trade Market News
Outlook: Ninety-eight percent of the U.S. corn crop was planted as of June 5, 2016. USDA’s weekly crop progress report rated 75 percent of the corn crop at good/fair, up from 72 percent a week ago.
USDA’s next WASDE will be issued tomorrow (June 10) and the average of estimates by industry analysts ahead of that report is that the agency will raise the old corn crop export estimate (at least 25-50 million bushels) and lower the carryout by 1.7 million bushels. They also believe that the production estimate for the 2016/17 crop will be reduced by 67 million bushels to 14.363 billion bushels.
Early farmer selling turned out to be a mistake and producers are now more cautious about unloading until they better understand the market top. The market is also bolstered by continued dryness in South American production areas, and Argentine farmers still failing to deliver enough corn to the ports. The weather premium built into the Midwest U.S. crop this past week may be premature, however, given that there is no high pressure ridge to lock in high temperatures, and the outlook actually calls for cooler temps ahead.
Strong corn products demand in China is pushing prices higher and the Middle Kingdom bought 113 KMT of U.S. sorghum.
Finally, it should be noted that now that the funds have acquired large long positions in the market, they are likely to defend them. Whether their positions are sustainable without adverse weather will take time to resolve.