Chicago Board of Trade Market News
Outlook: The relatively lagging pace of U.S. corn exports has been a point of discussion in the current 2015/16 crop year. It is increasingly acting as a constraining weight against the nearby December corn contract moving higher and contributed to this week’s attempted rebound fizzling out toward the higher end of the recent trading range. It is realistic to assume that the lower end of the range may be tested, which in the nearby December contract is the region below $3.72 bushel. A close below that price level could allow for a push toward $3.60 bushel. If so, the December contract is likely to receive strong support in that region because of a common interest among traders to purchase corn contracts from March 2016 onward at lower prices. As a result, end-users of corn are encouraged to consider creation of a purchasing plan for at least the first quarter of calendar 2016 should a buying opportunity present itself.
The current estimated carryout of 1.561 billion bushels for U.S. corn is ample but not burdensome. As well, the stocks-to-use ration of 11.3 percent is sufficient but there is not a lot of downside because eyebrows will rise if it falls below 10 percent. That event happening is not a major concern so long as weather patterns are favorable, the dollar remains strong, and global buyers continue to purchase in a hand-to-mouth pattern. (Last season’s stocks-to-use ratio for U.S. corn was 12.6 percent.)