Chicago Board of Trade Market News
Outlook: USDA will publish their WASDE report on Tuesday, December 10. Market participants are uncertain about the contents of this particular report and there is a wide range between estimates of analysts. This fact increases the prospects of an aggressive price reaction once the data is published.
A good deal of bearish news has recently been factored into corn futures, such as EPA’s potential reduction of the ethanol mandate, Chinese rejection of corn shipments containing trace amounts of the unapproved variety MIR162 and technical chart weakness. Bearish traders need some fresh news to continue driving the corn futures lower and a substantial increase in the yield estimate could give them what they are looking for, but any such adjustment to yields is not expected in Tuesday’s WASDE. Instead, the final corn yield estimate will be published on January 10, 2014.
There is also potential for a number of more bullish factors. These include an increasing in global ending stocks for feed grains because of recent reductions in South American corn planting. The estimate for U.S. corn ending stocks could also decline in Tuesday’s WASDE due to a strong export pace and healthy domestic demand from profitable ethanol and livestock feeding industries. Lastly, speculative funds continue to hold a large short position. The combination of market conditions are such that it appears easier for next Tuesday’s report to spark a limited short-covering rally than a continued sell-off.