Price action: May corn futures closed 3 1/4 cents higher to $4.53 1/4 and settled nearer session highs. That still marked an 11-cent loss on the week.
5-day outlook: Corn futures saw a volatile day of trade before closing modestly higher on the day. Positioning drove a lot of price action today as Monday’s USDA reports will yield a large catalyst on the marketplace. Traders have priced in a bearish outcome as prices have neared the early March lows as prices closed lower from Tuesday to Thursday this week. Monday’s reports are likely to set the tone for the coming week and even the medium-term trend until weather and spring planting begin to take hold of the market. A Bloomberg survey of analysts shows expectations for 94.4 million planted acres. Trade guesses ranged from 92.5 to 96.6 million acres. The consensus is the market is currently trading an acreage number around 95 million. Our survey yielded planted acres below average at 93.75 million, which would be bullish. For stocks, the Bloomberg survey estimated total stocks at 8.154 billion bushels as of March 1. That is below stocks a year ago, which totaled 8.352 billion bushels. Our forecast was below the trade average at 8.104 billion. Both of our estimates are below the trade average. The big question on stocks comes down to feed and residual use, which was rather disappointing in the first quarter of the marketing year.
30-day outlook: Once the dust settles following next week’s reports, attention will turn back to South America and Brazilian production as the safrinha crop continues to develop. Temperatures in Brazil remain and are forecast to stay above average. Precipitation is needed and expected over the next couple of weeks. World Weather Inc. notes that regular rounds of rain are expected over the next couple of weeks, improving safrinha crop conditions in nearly all areas. Portions of northeastern Brazil will miss much of the rain, which will raise crop stress for immature crops. While rain is forecast, the soil is currently so dry that even upcoming precip is not expected to fully restore soil moisture. Private forecasters have a fairly wide range of estimates for Brazilian corn production, but ultimately it will come down to weather over the next month. A bountiful harvest is likely to draw some export demand from the U.S., especially as trade barriers continue to go in place around the globe.
90-day outlook: Planting season is right around the corner and the market’s attention will quickly turn to planting pace and crop conditions. The Midwest will see two rounds of nearly widespread precip over the next week, helping boost soil moisture in advance of spring plantings. The shorter-term forecasts look favorable for establishing soil moisture and temperatures, which will be good for establishing crops. Key will be how the weather is in April and May as planters really begin to get rolling and if it stays dry enough to allow for timely fieldwork. A weather market is right around the corner and if acres come in tighter than expected next week, any delay could lead to sustained strength.
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