There haven’t been any weekly export reports since prices have tumbled. It will be interesting to see if the sharp drop will stimulate any traditional U.S. business for old-crop corn that was lost to sticker shock.
The other important report released on March 28 was planting intentions for the 2013-14 season. The estimate came in at 97.282 million acres, just 30,000 acres above the average trade guesstimate. Headlines declared the results to be bearish for new crop months, but it was really in line with expectations. Even with optimum yields, those extra acres will grow about 4 million bushels.
Prices of new crop contract months have fallen by 30¢ per bushel (Chart 2) since before the report, but for the most part, a record 14-billion-bushel crop had already been priced in.
In the meantime, bird flu and a pork disease in China threaten the slaughter and disposal of significant numbers of corn-consuming chickens and hogs. Not to mention, consumer’s fears that may lower demand.
The inventory report has created a fair amount of uncertainty. We are going to continue to remain sidelined at the present time. Late-season snow and rainstorms have replenished some much-needed sub-soil moisture in corn-growing regions. By the same token, though, the wet weather has slowed planting progress and has jeopardized high-yielding early corn plantings. Our only recommendations is to follow the weather and buy new-crop months at the slightest hint of a disappointing crop.