The corn market settled 5 to 6 cents off the lows after a bearish response to USDA data. Prices were still 1.5% to 2.4% in the red for the close. March futures ended the week on a net 13 ¾ cent loss. As a reminder the market is closed on Monday for MLK jr Day. USDA lowered the cash price by 5 cents to $4.80.
Weekly CFTC data showed managed money funds were building their shorts in corn during the week that ended 1/9. That strengthened their net short by 33.4k contracts to 230,723 contracts. Commercial corn hedgers were shown adding positions, with 43k new OI. On net they reduced their net long by 1,942 contracts to 291.
USDA raised their average corn yield by 2.4 bpa to 177.3 bpa while the average trade guess was to see a 0.2 bpa cut. Harvested area was cut by 600k to 86.5 million for a net 108 mbu larger production figure of 15.342 bbu. The average trade guess was to see 15.212 bbu going into the report. The extra corn availability led USDA to raise feed and residual by 25 and ethanol by 50. On net, ending stocks were 31 mbu looser to 2.162 bbu. The average trade guess going in was to see a 36.7 mbu cut, so the market was caught leaning the wrong way.
NASS counted 12.169 bbu of corn on December first, including 7.83 bbu on farm and 4.34 bbu off farms. With the 1.36 bbu of carry-in, and the updated production figure of 15.342, Q1 use was implied at 4.533 bbu. That compares to 4.215 bbu last year. The On Farm stocks number was the largest since 2010.
The global S&Ds from USDA led corn production 13.66 MMT higher, with 2.7 from U.S, -2 MMT from Brazil (@ 127 compared to 126.5 MMT expected, and 117.6 MMT from CONAB) and 11.8 MMT to China – which is now projected at a record 289 MMT. Global export demand was trimmed on net by 570k MT, though domestic use increased from the Dec WASDE. On net world corn stocks were upped by 10 MMT to 325.22 MMT – the trade was looking for 313.8 MMT on average.
The Rosario Board of Trade hiked their estimate of the Argentine corn crop to 59 MMT. USDA made no change to Argentina, at 55 MMT.
Mar 24 Corn closed at $4.47, down 10 3/4 cents,
Nearby Cash was $4.22 1/2, down 10 1/2 cents,
May 24 Corn closed at $4.59, down 10 3/4 cents,
Jul 24 Corn closed at $4.68 1/4, down 10 3/4 cents,
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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