Corn prices soften in search of fresh fundamental drivers
Corn futures ended last week with different tones for old-crop vs. new-crop contracts. Dec-21 contracts were nearly flat, closing up slightly for the week at $4.6000 per bushel. This first look at the upcoming U.S. production season was close to market expectations, but projected soybean acreage and demand leaves a bullish cloud over both markets. Nonetheless, Mar-2021 corn closed down $0.0750 at $5.4275 per bushel on Friday.
In its Ag Outlook Forum, USDA pegged new-crop 2021 corn plantings at 92 million acres—a bit shy of industry estimates ranging from 92.5 to 92.9 million acres. Yield is projected at 179.5 bushels per acre for production of 15.15 billion bushels. If domestic consumption for 2021/22 settles at 12.3 billion bushels (assuming a recovery in ethanol production), exports retreat to say 2.2 billion bushels, and beginning stocks can hang in there near 1.45 billion bushels, ending stocks for 2021/22 would be over 2.1 billion bushels.
All eyes are directed towards South America’s harvest (as well as the planting pace of the Brazilian safrinha crop). CONAB is projecting around 77 MMT of production from this year’s second-season corn crop.
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