Markets

Pre-Opening Corn Market Report for 6/8/2011

July corn was up 2 cents late in the overnight session. Outside market forces look negative today with weakness in energy markets and a higher US dollar. The short-term weather news appears somewhat negative, but all of the intended acres may not get planted, and weather uncertainty ahead should keep the market volatile. Producers in the eastern part of the Corn Belt have a few days to get more corn planted before they see another shift in the weather pattern back to normal to below normal temperatures and normal to above normal precipitation into next week. The market faces extremely tight ending stocks for the 2010/11 and 2011/12 seasons. As of Sunday, only 94% of the crop was planted compared to 86% the previous week and 99% last year. This leaves approximately 5.5 million acres left to plant with rain in the forecast for the northern half of the corn belt of 1-2 inches in the next 4 days. Ohio was just 58% complete, leaving 1.554 million acres to plant, and Indiana was 82% complete, leaving 1.062 million acres. There were also 378,000 acres in South Dakota and 325,000 in North Dakota that had not been planted. If we lose half of the acres left to plant due to wet weather ahead or due to flooding on the Missouri and we leave the rest of the supply/demand numbers unchanged from last month, US new crop ending stocks would come in at 490 million bushels, not the 900 million posted in last month's update. Traders also see significant corn losses to crops already planted along the Missouri River that might get flooded out for the year. Trade estimates of the total losses seem to be coming in at 200,000-500,000 acres. December corn recovered part of the steep two-day losses off of Friday's contract highs with a strong performance yesterday and a close near the highs. Talk of tightening ending stock estimates for Thursday's supply/demand update added to the positive tone. Traders see old crop (2010/11) ending stocks down about 25 million bushels from the 730 million forecast last month due to continued active feed and ethanol demand. For the 2011/12 season, ending stocks are expected to come in about 130 million bushels below last month's forecast of 900 million due to declined planted area. Mexico bought 822,960 tonnes of US corn for delivery over the next two marketing years, with 548,640 tonnes for 2011/12 and 274,320 tonnes for 2012/13. From the International Grains Council meetings, personnel from the Chinese National Grains and Oils Information center indicated that China could import 1.6 million tonnes for the 2011/12 season.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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