May and December corn closed 15 cents higher on Thursday after USDA’s Reports, while soybeans were mixed.
Garrett Toay, AgTraderTalk, says the 90-million-acre corn estimate was 1.7 million below the average trade guess and was likely the biggest bullish surprise of the report. However, quarterly stocks were also 80 million bushels below the average trade guess. So, corn disappearance was better than expected as well.
The corn market had sold off heading into the report and Garrett adds, “I think the market reaction was more of a function of we were just a little bit too cheap coming into the report. It was one of the biggest selloffs we’ve seen going into this report on record.”
Both May and December corn were 15 cents higher, plus scored daily reversals on the charts and closed above the 50-day moving average. He says from a technical standpoint that was also positive and could bring more fund short covering into the market.
Technically he says prices need to take out and close above $4.50 on the May contract first and then $4.63 is trendline resistance. “To get to $4.75 I think we’re going to need a bigger weather event to trigger a short covering rally by the funds,” adds Toay.
Soybean acreage was in line with trade expectations at 86.5 million and Toay thought that number could have been even more bearish than that with the lower production costs on soybeans verses corn.
Principle acres were down more than 6 million acres. However, Toay thinks acres will increase going into the June report. He says many are comparing 2024 to 2022 but the spring weather and amount of prevent plant acres will be the key. “You know 2022 we ended up with similar type acres at the end of the year but we had around 6 million acres of prevent plant that year. So, if we don’t have those PP acres we could get a claw back in acres in June,” he says.
