Chicago Board of Trade Market News
Outlook: The recent increase in price levels of is not diminishing the consistent demand for corn so long as profit margins remain favorable for domestic livestock producers, ethanol plants and foreign buyers. USDA’s Grain Stocks report on Monday will indicate just how strong that demand for corn has been throughout the past quarter. That report will be published in conjunction with the USDA’s Prospective Plantings report. There is already a common consensus that U.S. corn acreage will be down this summer; the uncertainty is by how much corn acreage will be down.
2014 weather is starting off cool across the U.S. Corn Belt. Temperatures will improve steadily but farmers need temperatures to be consistently warm enough to allow the soil to average about 55 degrees Fahrenheit. The progression of time reduces the prospect of early planting occurring this season. Furthermore, the increase in temperatures is normally accompanied by increased precipitation. Sufficient moisture is necessary but excessive moisture can turn the fields into mud and further delay planting.
Because of the strong export pace and the release of the quarterly stocks estimates next Monday March 31, there is a high probability that USDA will adjust their demand estimates in the April 9 WASDE for the present 2013/14 season. If there is no discovery of additional corn stocks, then any increase in demand should cause a reduction in the final ending stocks of corn for this season and a reduction in the beginning stocks of corn for the 2014/15 season, which will begin on September 1, 2014. The first estimate for the 2014/15 season (which is being planted this spring and will be harvested in the fall) will be published by USDA in the May 9 WASDE. By that point in time, the market will have a much better understanding about the spring planting rate of corn for the 2014/15 season. If the spring planting rate for corn is slow, then traders could price additional weather premiums prior to summer pollination. Funds have built a substantial long position in corn and they will not be disappointed if evolving market conditions justify their driving prices higher into the first of June.
Outlook: The recent increase in price levels of is not diminishing the consistent demand for corn so long as profit margins remain favorable for domestic livestock producers, ethanol plants and foreign buyers. USDA’s Grain Stocks report on Monday will indicate just how strong that demand for corn has been throughout the past quarter. That report will be published in conjunction with the USDA’s Prospective Plantings report. There is already a common consensus that U.S. corn acreage will be down this summer; the uncertainty is by how much corn acreage will be down.
2014 weather is starting off cool across the U.S. Corn Belt. Temperatures will improve steadily but farmers need temperatures to be consistently warm enough to allow the soil to average about 55 degrees Fahrenheit. The progression of time reduces the prospect of early planting occurring this season. Furthermore, the increase in temperatures is normally accompanied by increased precipitation. Sufficient moisture is necessary but excessive moisture can turn the fields into mud and further delay planting.
Because of the strong export pace and the release of the quarterly stocks estimates next Monday March 31, there is a high probability that USDA will adjust their demand estimates in the April 9 WASDE for the present 2013/14 season. If there is no discovery of additional corn stocks, then any increase in demand should cause a reduction in the final ending stocks of corn for this season and a reduction in the beginning stocks of corn for the 2014/15 season, which will begin on September 1, 2014. The first estimate for the 2014/15 season (which is being planted this spring and will be harvested in the fall) will be published by USDA in the May 9 WASDE. By that point in time, the market will have a much better understanding about the spring planting rate of corn for the 2014/15 season. If the spring planting rate for corn is slow, then traders could price additional weather premiums prior to summer pollination. Funds have built a substantial long position in corn and they will not be disappointed if evolving market conditions justify their driving prices higher into the first of June.