Current Marketing Thoughts
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Can Exports Push the Corn Market Higher?
Jan 17, 2014
Corn traders continue to talk about an old-crop market that appears to be "range bound." Range Bound: a term used by traders to identify a market that appears to be trading between two identifiable channels. For corn, specifically the MAR14contract, major support at the low end of the price range seems to be somewhere between $4.00 and $4.20. On the flip side major resistance seems to be up in the $4.40 to $4.60 area. Yes, there are several dynamics and structural items in the corn trade that need to be monitored in the next 30-days, but at this juncture none appear poised to rock the market in one direction or the other. Hence, why many in the trade are starting to talk more about consolidation, narrower trading ranges and less volume in the days ahead. The way it looks now, we might not see or hear any major structural import changes from China in regard to US corn "cancelations" for several more weeks, or at least until the Chinese government has finished buying all of their domestic supplies and have a better handle on their current needs. Lets also keep in mind it probably won't be until March, at the earliest, that some type of change or adjustment will be made to the nearby US "supply and demand" balance sheet. Sure, we have the USDA "2014 Ag Outlook" towards the end of Feb, but the new-crop data seem well anticipated and telegraphed, so I don't see a lot of real "surprises" until possible the March USDA report. The bears will continue to argue bogus "feed/residual" numbers and the bulls will argue increasing overall demand. Net-net, a "tug-of-war", in regard to price looks to be the theme. With no major weather headline to provide the suspense we may see very little overall price movement prior to planting. Click here for my daily report...
US Export Sales Remain Strong: Despite the Chinese cancellations export sales remain strong as Japan, South Korea and others have all stepped up. Keep in mind export commitments are running close to 125% ahead of last year. They have also now reached almost 80% of the USDA's annual export estimate with a ton of time remaining in the marketing year. Generally, at this stage of the game, we only have about 50-55% of the USDA's export sales committed for. Thoughts continue to be that US corn exports may need to be rated higher, even as we take into account the Chinese cancelations. Click here for my daily report....