Ukraine corn producers mull 2018 intentions in light of new crop demand projections

2018/1/18 15:17:01

As corn producers around the world look at the market and try to game plan 2018 cropping intentions, China’s planned dramatic increase in ethanol production appears to be one of the most important factors

 


January 18, 2018

 

From his vantage point in Chicago Brian Grossman evaluates current conditions and chances for corn to make a major contribution to 2018 commodity profitability:

 

A new year, new month, new week and yet the routine remains the same for corn. That routine is simply sideways to lower as the last series of USDA reports have come and gone with no surprises or help for volatility. With all the anticipated hype over Friday’s reports, corn struggled to find a reason to move. However, given the new set of “facts” for the market to digest, stagnation may be our best friend.

 

Hitting on corn’s first surprise – kind of – was yield. Not only did the yield come in above the average trade estimate; it came in at a strong new national record at 176.6 bushels per acre. 1.2 bushels per acre above the December estimate and above last year’s record 174.6. Shock value, no doubt, however the silver lining is total production; coming in at 14.604 billion bushels, the average trade was looking for 14.579 billion. This was contributed to the fact that harvestable acreage fell to 82.703 million versus the November estimate of 83.119.

 

With only a minor adjustment to beginning stocks, 2017 production moved the total supply to 14.604 billion bushels and was reflected in record large December 1st Quarterly Grain Stocks. Coming in at 12.516 billion bushels and 7.739 billion remaining on farm, it isn’t hard to find corn; however, it may be hard to find corn for sale as producers continue to build new storage with the hopes that a market recover is just around the corner. After all, it can’t go much lower, right?

 

It most definitely can go lower, and it just might go lower yet, too.

 

However, this past Friday gave corn every reason in the world to take the anticipated next leg lower. Record yield, record ending stocks, record quarterly grain stocks and yet corn is holding its own. While a new contract low was posted on Friday; follow through selling has not yet been found this Monday. Is the market signaling a change or just more of the same?

[…]

https://born2invest.com/articles/is-th ... naling-a-change-for-corn/

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