The corn market has been on a bullish run since the January report. The carryout has continued to decline, as export demand continues to increase.&nbsp;In that time period, the USDA has increased export projections by 300 million bushels, ultimately placing exports at 1.750 billion bushels. As a result the USDA placed the current carryout at 1.331 billion bushels or 9.9 percent carryout to use ratio. That allowed price action to react and trade to $5.24 in the July. Funds have been active buyers this late winter and spring. Fund length saw a high of 283,000 contracts in early April. This buying allowed producers to make sales thus the cash market (basis) has eased.
Overall, the USDA left livestock feed and ethanol demand unchanged. However, with poor logistical issues this winter, ethanol production was curbed. Recent early spring moisture left producers encouraged as well a flat price rally in new crop. Traders will begin to spend time projecting potential new crop yields and demand scenarios. With the firmer price action in new crop one would expect to see an increase in corn acres in June. Remember the March intentions was a survey of farmers during the first two weeks of March.&nbsp; Price for new crop corn futures at that time was at the mid-$4.70 level.&nbsp; The question will remain, &ldquo;Did we buy more corn acres?&rdquo; Traders continue to scratch their heads as to what happened to the nearly 8.3 million acres lost last year to prevented planted acres. In essence, this acreage estimate still has some room to swell.&nbsp;
The driving forces throughout the early summer will first be weather and demand destruction. The first point is reasonable and affects planting pace and getting the crop off to a good start. The latter is an issue impacting domestic and export demand. Will $5 corn or a stalling China economy aid a lag in exports the balance of the year? Will slow logistics cause cancellations or determine that demand from the ethanol and feed sectors were adversely affected? Nonetheless, outside of weather, the fund positions and global politics have changed from what was exhibited this last fall. That will keep volatility in the market.
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July futures
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Date
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High
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Low
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Close
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April 21, 2014
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4.99 1/2
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4.90 6/4
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4.93 3/4
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March 21, 2014
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4.85 3/4
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4.81
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4.83 3/4
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April 22, 2013
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6.30
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6.18 1/4
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6.23 1/2
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Changes in corn plantings from 2013 to 2014. 

2014/04/corn-map-commodities_13983904234909_largethumb.jpg

2014/04/corn-map-commodities_13983904234909_thumb.jpg

2014/04/corn-map-commodities_13983904234909.jpg

The corn market has been on a bullish run since the January report. The carryout has continued to decline, as export demand continues to increase.

Commodities: Corn market continues bullish run

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