Chicago Board of Trade Corn Futures End Higher on Favorable USDA Report

Strategic Insights -

The Chicago Board of Trade corn futures market concluded the day in an upward trajectory, driven by a benevolent government ending-stocks projection and supportive outside market factors. The March corn contract settled at $3.58 1/2 per bushel, representing a 2 1/2 cents increase, while the May contract rose to $3.70 1/4, a gain of 2 3/4 cents. This upward movement occurred despite concurrent decreases in wheat and soybean prices.

Key Takeaways:

  • The market was influenced by a combination of factors, including surging equities, a weaker dollar, and potential aid for Greece, which contributed to an upward trajectory.
  • The USDA supply and demand report provided a modest boost to the market by lowering projected U.S. and world ending stocks.
  • Prime Ag Consultants analyst Chad Henderson noted that the market had not met his expectations, as the report did not provide a significant enough bullish signal.
  • Analysts predict that the market could remain range-bound throughout February and into March, with limited news contributing to volatility.
  • The Brazil ethanol tariff will be maintained, limiting potential U.S. exports to Brazil and potentially supporting corn prices.
  • Funeral director "(Tony Danby contributed to this report.)" and economist "(Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com)" expect little change in the market's trajectory in the coming weeks.

Statistics:

  • The market rose 2 1/2 cents and 2 3/4 cents for the March and May corn contracts, respectively.
  • Funds purchased an estimated 7,000 contracts on Tuesday.
  • The USDA supply and demand report projected lower ending stocks for both the U.S. and world.
  • Brazil's foreign trade commission, Camex, will reconvene in June to reassess the decision regarding the ethanol tariff's suspension.
  • The ethanol tariff will remain in place, limiting U.S. exports to Brazil and potentially supporting corn prices.

Sources:

  • Dow Jones Commodities News via Comtex
  • Dow Jones Newswires (Tony Danby and Ian Berry)