Chicago Board of Trade Market News
Outlook: Back on February 27 this Outlook section discussed the prospects of the soy complex leading corn contracts into a short-term sell-off and that such an event could be a favorable buying opportunity for end-users of corn. Such an event has happened and the highest probability now seems to be that corn futures will strengthen back-up prior to USDA publishing the Prospective Plantings and Grain Stocks reports on March 31.
The Grain Stocks report will be important because it gives an update about the amount of grain on hand at the start of March, both on-farm and off-farm. U.S. farmers have been patient sellers of corn and that has given some support to basis throughout the Corn Belt. That measured selling could result in Grain Stocks data showing that there is abundant product that needs to be moved before the next harvest. However, the potential production of the next harvest will be the more weighty matter in the minds of market participants.
The Prospective Plantings report will be the first surveyed indicator of what U.S. feed grain acreage is likely to be. Futures contracts can react aggressively in accordance with the contents of this report. The smaller the potential acreage, the greater the anxiousness about weather’s influence in future yields. U.S. weather will be heavily monitored, but so will planting conditions in the Black Sea region and China. Unfavorable weather in any of these locations could result in excited price action. Corn producers generally seem to be waiting in anticipation for such a chain of events to develop and create a better marketing opportunity for much of the current stocks that are being held.