Price action: March corn futures rose 5 1/4 cents to $6.16 1/4, a gain of 20 cents for the week and the contract’s highest closing price since $6.22 on June 10.
5-day outlook: Corn futures rose for the fifth straight day and settled at the highest levels in over seven months on strengthening export demand. Earlier today, USDA reported net U.S. corn sales for 2021-22 of 1.091 MMT for the week ended Jan. 13, more than double the previous week and up 48% from the average for the previous four weeks. Sales topped expectations ranging from 500,000 MT to 1 MMT. Weekly exports of 1.298 MMT, a marketing-year high, rose 28% from the previous week and 29% from the four-week average. The market’s strong performance this week sets it up for further gains next week, especially if March futures can break above the late-December high at $6.17 3/4.
30-day outlook: South America weather will be closely followed in coming weeks after extreme heat and dryness prompted many forecasters, including USDA, to cut production estimates. Some rain relief may reach dry areas later this month, but dryness remains concerning. Paraguay and far southern Brazil will see little to no rain of significance and hot temperatures through tomorrow, and crop stress and yield reductions will increase as moisture from recent rain is lost to evaporation, World Weather Inc. said today. Rain will increase in Rio Grande do Sul Sunday into Monday before Paraguay and the remainder of far southern Brazil see an increase in rain Jan. 25-28. USDA will update its Supply and Demand figures on Feb. 9.
90-day outlook: Sustained strength in exports will be required for corn futures to hold above $6.00. Crude oil futures reached a seven-year high this week, and continued gains could encourage speculators to boost bullish bets in grain markets as the “inflation trade” gains momentum. Strong demand from domestic ethanol producers could also underpin corn prices over the winter, though record ethanol stocks and weaker margins may slow distiller operations in the weeks ahead. Later this winter, market focus will shift toward the spring planting outlook and prospects for reduced corn acres at the expense of corn. We project a decline of 3 million acres in corn plantings in 2022 from 93.4 million acres planted in 2021.
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