Chicago Board of Trade Market News
Outlook: The estimate for the average U.S. corn yield will be the variable of primary importance within USDA’s data that will be published on Friday, October 9, 2015. The previously released stocks data held no major surprises and it is still too early in the 2015/16 crop year to make significant changes to demand estimates. The expectation is that the October estimate for average U.S. corn yields will be 166.4 bushels per acre (bpa) per a recent survey conducted by Dow Jones. This would be a 1.1 bpa decline from the September estimate of 167.5. However, variability in yields throughout the Corn Belt has resulted in a range of pre-report predictions among analyst of 161 to 169.6 bpa. An October estimate below 165 bpa is expected to support prices and anything above 167 could result is a retest of the prior August low. An October yield estimate within the range of 165 to 167 bpa could most likely result in corn contracts creating a horizontal trading range that will extend into the first of December, at which point total demand can be better defined.
A second potentially price influencing factor will be the estimate for harvested corn acreage. Market participants are expecting USDA’s October data to show a small decline in total corn acreage to 80.9 million acres from the September estimate of 81.1 million acres. A price influencing surprise could result from any reduction below 80.5 million bushels, or any increase in U.S. corn acreage. The outlook is that it will be the composite of changes to both yield and acreage that will determine the full influence on near-term prices, as these two price influencing factors could either support or offset each other. Demand and South American weather will then become increasingly important as the year-end approaches.