Chicago Board of Trade Market News
Outlook: The U.S. corn harvest started the week at 15 percent complete and is expected to be a fifth of the way done by its end, both of which are behind average. The cause is an early season prediction of a dry, hot end to the U.S. growing season has instead brought the opposite – heavy rains that will affect crop quality if they persist. Still, at this juncture, the crop remains rated at 74 percent good/excellent. The yield potential is rising in some states and falling in others, but most expect USDA to lower the overall yield in its next report.
U.S. corn export sales this week were overall neutral but next week’s report will reflect a milestone with the sale of 1.577 MMT (two-thirds old crop) of corn to Mexico. That amounts to the fourth highest daily sale on record and the largest ever single day sale to Mexico. Corn sales to Mexico this year are on track to be larger and that market has replaced Japan as the largest one for U.S. corn. Overall, corn export lifts are running 51 percent ahead of last year and this is pushing freight charges higher.
The International Grains Council on Thursday reduced its forecast for the 2016/17 world corn crop by 3 MMT (1/3 old crop), mostly due to a downward assessment of China’s crop.
Here in the gut slot of the U.S. harvest, corn cannot break above $3.46 nor below $3.14, and with the soybean/corn ratio approaching 3:1, soybean planting is favored in the spring.
Tomorrow USDA will release its quarterly grain stocks estimate, and its annual report on small grains.