Chicago Board of Trade Market News
Outlook: The 2015/16 crop year for U.S. corn and sorghum began on September 1, 2015. The crop year starts with attractive price levels for end-users of feed grains. Corn futures prices for the crop year are averaging below $3.75 per bushel. Livestock and poultry producers have the means to lock in favorable margins. Ethanol producers also have the means to fix their corn costs at attractive levels, and that can be an advantageous opportunity whenever margins are compressed thin within a competitive market.
Next Friday (September 11, 2015) USDA will publish an update of their latest yield estimates. Changes to corn yield estimates are not expected to be significant in size because there is presently limited harvest data available. Corn contracts could experience a small bounce from current price levels next week prior to the release of USDA’s data, but no aggressive price action is expected before or after the reports on Friday. Rather, the outlook is that the majority of market participants will instead seek to evaluate when the seasonal low is being established in order to extend their purchasing strategies. The rate of feed grain export sales commitments are expected to increase when there is a general perception that corn contract prices have created a harvest bottom.
Domestic feed demand will be better defined when USDA publishes the quarterly stocks data at the end of the month on Wednesday, September 30, 2015. This data will show the beginning feed grain stocks for the current 2015/16 season; this data will directly influence the projections for this season’s ending stocks. That more distant report is expected to have a more prolonged influence upon price action than will the September adjustments to yield data that will be released next week.