Chicago Board of Trade Market News
Outlook: December corn futures are up 5 ¾ cents (1.6 percent) for the week after Thursday’s CBOT short-covering spree in soybeans offered support for feed grains as well. Fundamental news remains light for the corn market, except that harvest progress continues; anticipated bad weather may slow progress early next week.
USDA reported Monday that 63 percent of the crop was harvested, exactly in-line with the five-year average. The report featured a large increase from the prior week as farmers took advantage of better weather and accelerated field work. Progress should be substantial this week as well with generally good conditions expected through the weekend. Early next week, however, winter weather will develop across parts of the Corn Belt that will keep farmers inside. Fortunately, harvest concerns thus far have been too small to cause significant worry for the market. Large ending stocks, which help cushion prices against minor supply/demand bumps, are a comforting factor as well.
This week’s USDA Export Sales report featured 0.394 MMT of new-crop corn sales and exports of 0.755 MMT. YTD bookings (exports plus unshipped sales) reached 21.832 MMT, up 28 percent from this time last year. The weekly rate of shipments fell this week as the U.S. dollar climbed sharply higher and the global financial markets suffered a correction. The dollar turned lower today.
Like last week, harvest progress accelerated farmer sales and pressured basis levels. Commercial demand remains solid with ethanol production up 3.4 percent last week and cattle and hog feeding margins improving. Across the U.S., cash corn prices average $3.25 this week, down 1 percent from last week but up 6 percent from this time last year.
From a technical standpoint, December corn futures remain in a tight trading range with support at the now-equal 40- and 50-day moving averages ($3.63/bushel) and $3.80 as strong resistance. The rapid, early pace to corn exports at the start of the marketing year originally offered support for the futures market but the recent slowdown in exports has allowed bullish momentum to subside. Without new fundamental news to elicit excitement from traders, December futures are range-bound for the near-term. Once exports pick up again, however, the market is likely to resume its seasonal grind higher.