Chicago Board of Trade Market News
Outlook: USDA will release the November WASDE report on Monday, November 10. A U.S. corn yield of 175 bushels per acre (bu/acre) is the average of the analysts’ estimates for this report. In other words, the estimate is that the yield from U.S. corn will increase from 174.2 bu/acre in the October report to a new estimate of 175 bu/acre. How the actual number comes out in relation to that estimate will be a primary factor in determining if Monday’s report is considered bullish or bearish for corn and related feed grains.
The November WASDE will also contain important data for the soy complex and wheat markets, and that associated data can influence the intensity of the data for corn. For example: an average corn yield estimate below 175 bu/acre and no increase in ending stocks could be considered bullish for corn, but that could be negated by a substantial yield increase for soybeans that establishes an overriding bearish tone in the market.
If soybean production data is bearish, the degree of near-term influence on corn contracts will depend upon other factors such as weather and demand. Cold weather is really no big deal, but any prospect for cold, wet and windy weather could make traders reluctant to press corn contracts too hard when 15 percent is still remaining in the field and a sizable amount is stored in open-air piles. As harvest is completed, demand will transition to become the dominant factor. A sizable drop-off in export sales and further reductions in petroleum prices, potentially weighing on ethanol producer margins, could be enough to enable corn contracts to trend lower. Such a composite of market factors will determine how low corn contracts can trend, but general interest in buying at prices below present levels will presumably limit the downside and establish a trading range into 2015.