July corn was trading 5 cents higher late in the overnight
session. China futures were up 0.2% overnight. Outside market
forces look mixed with choppy trade in equities and slightly
weaker energy and metal markets. With Decatur Illinois corn bid
at 43 cents premium to July corn and May corn trading at a 17
cent premium to July corn, traders are not looking for any
deliveries against the May contract next week. This leaves the
potential for a very volatile expiration period for May corn and
could help support July corn. May corn closed sharply higher
yesterday while July was moderately higher into the close but on
the highs of the day and December corn recovered from moderately
lower on the day late in the session but still closed lower.
Aggressive buying emerged late in the day for old crop corn. A
firm basis market at the gulf and talk that the offers were
pulled for delivery in the next few months due to a lack of
producer selling helped to support. Weekly export sales came in
at 645,600 metric tonnes for the current marketing year and
180,600 for the next marketing year for a total of 826,200. As of
April 19th, cumulative corn sales stand at 83.3% of the USDA
forecast for 2011/2012 (current) marketing year versus a 5 year
average of 80.3%. Sales of 374,000 metric tonnes are needed each
week to reach the USDA forecast. The data suggests that the USDA
may be in a position to raise their export forecast in the May
10th update. December corn was lower into the mid-session with
talk of active planting in Iowa and ideas that the crop will get
off to a fast start this year. The Buenos Aires Grains Exchange
reduced their corn production estimate by 1 million tonnes from
their previous estimate to 19.8 million tonnes as compared with
the April USDA forecast of 21.5 million tonnes. With the poor
winter wheat situation and shift to corn acres, Ukraine may be in
a position to export near 15 million tonnes of corn from 14
million for the 2011/12 season and just 5 million the previous
few years. The International Grain Council left their world
production forecast for this year at 900 million tonnes, up 4%
from last year but world consumption is expected to expand to 893
million tonnes. Open interest has come down rapidly since the
April 18th lows with talk of some short-covering helping to fuel
the recovery bounce.