The corn market is currently in deep retracement after the USDA’s report. However, the January report didn’t confirm the negative sentiment concerning the supply/demand. The production forecast was increased by 48M bushels. The reserves were increased by 2M instead of 100M bushels. The range of expected prices was reduced by 20 cents down to $5.7-6.7 per bushel.
The global production forecast was increased by 540K tons. The global import/export is expected to grow as well. The ending stocks were increased by 950K tons while the beginning stocks were slightly reduced.
The market weakness seems to be temporary. Fundamentally, investors are still questioning the USDA’s January report as it doesn’t take into account the weather conditions in South America. Any unfavorable weather conditions will support the price of corn this year because the ending stocks/ consumption ratio is critical.
According to the Department of Commodity Trading of , stronger US stats and higher oil prices may also support the market.
