Futures news, corn. According to last, February report of USDA, the size of planted and harvested areas, yield, opening stocks, and production remain the same in the USA. Predicted US import has risen by 5 mln.bushes, export has equally risen due to smaller supply of Argentina corn and higher US import. US ending stocks of corn have dropped by 45 mln.bushes, to the record low point of 801 mln.bushes.
Global stocks of corn have dropped to 125.35 mln.tons, which is the lowest point since the season of 2006/07. In general, this has resulted from lower corn production in Argentina, where hot and dry weather caused the shortage of harvested areas and yield. Consequently, global corn production has also dropped.
Therefore, judging from the last report, 2012 is expected to be moderately deficit for corn market, which is a positive factor for the market.
However, significant role is also played by a number of criteria expected for the season of 2012/13. USDA preliminary predictions foresee the following changes:
- planted areas: 94.0 mln. acres (+2.3%)
- harvested areas: 86.8 mln. acres (+3.3%)
- yield: 164.0 bushels per acre (+11.4%)
- production: 14.235 bln. bushels (+15.2%)
- export: 1.875 bln. bushels (+10.3%)
- ending stocks: 1.623 bln. bushels (+103%)
In other words, as explained by analysts of the Department of Derivatives Trading within , due to tense situation with the balance between supply and demand as well as record low level of transit stocks in the USA and in the world as a whole, high prices for corn may remain from February till the beginning of summer, as the market is very sensitive to possible non-favourable weather conditions. The price may then be negatively influenced by the increase of harvesting areas that are required to maintain the balance between supply and demand during the season of 2012/13.
This combination of differently directed factors: tense balance and low stocks made during the season of 2011/12 from the one side, and the possible increase of harvesting areas and, consequently, yield in 2012 from the other side, may lead to uneasy market during summer months and rapid decline when the expectations of high yield are met.
