Home   News

Morning Corn Commentary

Feb 22, 2012

The corn market turned lower on Tuesday and actually stayed lower most of the day.  The March contract closed down about 12 cents and the December closed down about 4 cents with both off the lows.  The corn market opened about 5 lower and that ended up being the high of the day.  The corn market spiked to about 14 lower before bouncing, but selling appeared again and took March corn down about 16 cents.  The corn market did find some support down about 15 cents and we saw a rally to about 5 cents off the lows and then another rally to about 7 cents off the lows, but corn traded in a range of 10-13 lower in the old crop.  The new crop didn’t sell off nearly as much as old crop, but there is still a lot of talk about a big acre number out of the USDA outlook conference the end of the week.  We will also get some supply/demand data at the conference and maybe we are seeing some liquidation ahead of this meeting.  We also continue to see soybean/corn spreading as traders are betting we are going to get a better corn crop out of So America and Brazil beans have been hurt by the late drought.  There is some talk of actually raising the corn production in Brazil which could pressure old crop and bigger acre will pressure new crop.  The volume was good at 422,000 contracts and funds were sellers of about 15,000 contracts.

Overnight, the corn market was slightly lower as the outside markets were a little negative and the selling just continued from yesterday.  The corn market has been in a trading range for the last 6 weeks after the January USDA report, so it will be interesting to see if it holds the bottom of the range with the USDA Outlook meetings this week.  We are probably seeing some profit taking this week after corn attempting to take out the recent highs and failed about a week ago.  There isn’t a lot of new news out on corn as the market probably bounces around here until we get the new data from the Outlook conference, but a stronger US$ is going to pressure grains.  The only upside is there are rumors that China is sniffing around the PNW for US corn, but nothing confirmed and sometimes it is hard to confirm these rumors.  A year ago, the rumor didn’t get confirmed for 2 months.  The corn will be called slightly lower and with a stronger US$ it might be hard to rally.  The soybeans have remained strong, so that could support corn, but if the beans sell off aggressively, corn won’t have a chance. 

GLOBEX Overnight
Contract         Last     Net Change  High   Low     Volume
ZCH12                       627^2 -2^2                 630^6 625^6 6153
ZCK12                       631^4 -2^0                 634^4 630^0 4388
ZCN12                       635^2 -2^2                 638^4 633^6 1995
ZCU12                       589^4 -2^2                 591^6 588^4 916

LaSalle Street News Early Opening Calls:

LaSalle Street News Top News
-- Traders note severe cold weather in the Ukraine has hampered that country's grain exports to Japan and delivery delays are running a few weeks late
-- Grain analysts say Japan has stepped up its US feed corn purchases, some saying as much as  1.8 mln mt has been sold for the April to June delivery period.
-- Japan's Ag Ministry issued another SBS tender for Feb 29th where they're seeking 200,000 mt of feed Barley and 100,000 mt of feed Wheat