Corn Futures Expected to Open Steady Amid Light News and Variable Weather Conditions

Strategic Insights -

Chicago corn futures are expected to open steady to 1 cent per bushel lower on Wednesday due to a lack of fundamental news and warmer temperatures in the long-term weather models. Traders are waiting for the soybean market to move, as its crop is entering a critical growing stage. Meanwhile, demand for corn is preventing the large crop from driving the market too low, while funds adding to their short positions are keeping the market from rallying too high.

Key Takeaways:

  • Corn futures are expected to open steady to 1 cent per bushel lower on Wednesday due to a lack of fundamental news.
  • The warmer temperatures in the long-term weather models are too late to affect the corn crop, and some late-planted corn may be affected but not enough to change the large yield.
  • Demand for corn is preventing the large crop from driving the market too low, while funds adding to their short positions are keeping the market from rallying too high.
  • The market is following the movement of soybeans due to the critical growing stage of the soybean crop.
  • The global weather forecast indicates temperatures in the 80s this weekend in many areas of the corn belt, with the 90s possible in Missouri and southern Illinois.
  • Rainfall is expected to be between 0.25 and 1.50 inches for Minnesota, western Wisconsin, Iowa, eastern Nebraska, and northeast Kansas.
  • The Busan branch of Korea Feed Association has purchased 52,500 metric tons of optional corn from Cargill in a tender held on Wednesday.
  • Eastern Canadian corn production is expected to drop in the year 2004-05, with production estimated at 309.2 million bushels, down from 357 million bushels in 2003-04.
  • The drop in eastern Canadian corn output is expected to bolster the imports of U.S. corn by 4 million bushels in 2004-05.
  • Kenya's total corn production for 2004-05 is projected to be below average, with the U.S. Department of Agriculture's Foreign Agriculture Service projecting 2.1 million tons.

Statistics:

  • 1 cent per bushel lower, the expected opening price of corn futures on Wednesday.
  • 80s and 90s, the expected temperatures in many areas of the corn belt and Missouri and southern Illinois, respectively.
  • 0.25-1.50 inches, the expected rainfall for Minnesota, western Wisconsin, Iowa, eastern Nebraska, and northeast Kansas.
  • 52,500 metric tons, the amount of optional corn purchased by the Busan branch of Korea Feed Association from Cargill in a tender held on Wednesday.
  • 309.2 million bushels, the estimated production of eastern Canadian corn in the year 2004-05.
  • 357 million bushels, the production of eastern Canadian corn in 2003-04.
  • 4 million bushels, the expected increase in U.S. corn imports due to the drop in eastern Canadian corn output.
  • 2.1 million tons, the projected corn production for Kenya in 2004-05.

Sources:

  • ODJ via COMTEX, Jul 28, 2004
  • Dow Jones, Jul 28, 2004
  • Ontario Corn Producers Association, updated supply and demand table
  • USDA's Foreign Agriculture Service, corn projections for Kenya
  • COMTEX (http://www.comtexnews.com)
  • Michael Schroeder, Dow Jones Newswires, 312-341-5780, mschroeder@osterdowjones.com