Last week brought relaxation in corn futures after the previous week’s volatility as the funds appear to have broken a bit. Mar-21 corn futures closed the week lower by about $0.06 per bushel at $4.205. Trade activity may also be positioning ahead of Thursday’s USDA report.
Analyst consensus is that USDA will lower projected U.S. corn ending stocks in the December WASDE, with estimates averaging 1.691 billion bushels. A couple of categories are worth watching, most notably exports. China’s import numbers are likely to be reported higher, and much of that demand is expected to be sourced from the U.S. Accordingly, an upward revision is likely in this week’s report, potentially driving corn stocks as low as 1.6 billion bushels, which could put the stocks-to-use ratio below 10 percent.
Globally, attention will be given to any changes in South American production. The weather has improved in the last week or so, and rains are expected to be relatively consistent for most of Brazil and Argentina over the next few weeks. Some regions remain dry, however, and considering the crop was also sown during dry conditions, the likelihood remains of a smaller production number from last year.
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