Corn followed much the same pattern as soybeans yesterday. Early weakness was quickly followed by a rally that lasted into early afternoon with corn ending the day closer to its highs than soybeans. Trade in the overnight session was lower with steady erosion seen through the end of that session. Traders indicate that corn is less subject weather news from South America at present than is the case with soybeans. This is due to the fact that corn in Argentina is mostly past the pollination stage and corn-growing areas in southern Brazil have seem improved moisture levels in recent weeks. One analyst said that this puts the focus on export demand for US corn as well as the pace of farmer selling. Basis levels saw one sharp downward turn at the Gulf earlier this week as the export pipeline suddenly appeared to be full, but basis levels have since steadied and selling remains mostly light. That analyst pointed out that the focus in corn may also be shifting to this year’s planting intentions in the US where we have seen wide swings in the new crop soybean/corn ratio over the past two months. In recent weeks corn has gained versus soybeans with traders noting that this is largely in reaction to private forecasts of lower corn acreage and substantially higher soybean acreage versus last year. The USDA will issue its latest Export Sales Report this morning. Traders are looking for a drop of 400,000 to 700,000 tonnes in corn versus last week’s large figure of more than 1.1 million tonnes. A South Korean feed maker bought 110,000 tonnes of US corn.
CASH NEWS AND TENDERS: A South Korean feed maker bought 110,000 tonnes of US corn.
WEATHER: Dry conditions have reasserted themselves in Argentina since mid week and this is expected continue there through Saturday. Temperatures look to be somewhat above normal over that stretch, but less hot than in recent weeks. Temperatures this weekend and into early next week may swing from above to below normal. The consensus on rain seems to be that it will be scattered to widely scattered on Sunday and Monday. In Brazil, most growing areas continue to receive scattered showers and thunderstorms with coverage in the main corn-growing area of Parana considered adequate. In the US, more than 60% of the lower 48 states now have snow cover which is the biggest area in five years.
TODAY’S GUIDANCE: Corn is following the weather in Argentina along with soybeans, but this factor may be losing its hold over the corn market to some degree. That is because conditions have improved in major corn-growing areas in Brazil in recent days and weeks. This may mean that the corn market will be less responsive to a resumption of the drought in Argentina if that is what we get. Soft demand at the Gulf has kept the corn supply pipeline adequately stocked this week, and we will see today if export sales are strong for the second straight week. If they are, it may start taking somewhat higher prices to keep the export pipeline stocked. Also, a push down to the January lows or lower may start to seriously erode the number of corn acres that farmers intend to plant this spring, and that should bring good support.