Advice: [New advice issued 2/25/22--available to Pro Farmer subscribers only] Start a $1 trial to receive advice updates.
Price action: May corn futures plunged 34 1/2 cents to $6.55 3/4, the lowest closing price since Feb. 18 but still up 3 cents for the week. December futures fell 25 cents to $5.79 3/4.
5-day outlook: Corn futures followed wheat lower in a broad grain market selloff after Russia’s invasion of Ukraine yesterday sent prices to multi-year highs. The Russia-Ukraine conflict, barring a quick resolution, will command market focus next week, with corn likely to take its directional cue from wheat. Corn futures’ quick reversal lower after briefly rising above $7.00 yesterday suggests the market is near an exhaustion point and may be close to establishing a near-term peak. South American weather and early harvest results will also be of interest.
30-day outlook: Corn futures need strong domestic and foreign demand, plus strength in soybeans, to sustain elevated prices. The market continues to see signs of demand erosion in recent weeks, with ethanol production down sharply from late-2021 levels and exports running well behind last year’s pace. USDA today reported net 2021-22 U.S. corn sales of 1.041 MMT for the week ended Feb. 17, up 27% from the previous week, up 4% from the average for the previous four week and above trade expectations ranging from 500,000 to 900,000 MT. Still, U.S. export commitments (accumulated exports plus outstanding sales) lag last year’s levels by 19% (albeit narrower than the 21% shortfall a week ago). USDA’s March 9 Supply & Demand Report will be watched for any changes to the domestic and global balance sheets.
90-day outlook: Traders will increasingly shift attention to the U.S. spring planting outlook, along with development of Brazil’s safrinha second-crop corn. U.S. farmers are widely expected to plant fewer acres to corn due to high prices for fertilizer and other inputs. USDA, at its annual Outlook Forum this week, estimated U.S. corn plantings will decline to 92.0 million acres from 93.4 million in 2021 as high prices for fertilizer and other crop inputs favor soybeans. We currently expect U.S. corn plantings to decline 3 million acres this year to 90.4 million acres, though results from our spring acreage survey will give us a better idea of planting intentions.
What to do:
Hedgers: NEW ADVICE – [available to subscribers only] Start a $1 trial to receive advice updates.
Cash-only marketers: NEW ADVICE – [available to subscribers only] Start a $1 trial to receive advice updates.
