Corn futures dropped dramatically out of the report, and are trading near their lows for the day at midday. Futures are down by over 3% in old crop and by 11 to 12 ½ cents in new crop. USDA lowered the cash price by 5 cents to $4.80.
USDA raised their average corn yield by 2.4 bpa to 177.3 bpa while the average trade guess was to see a 0.2 bpa cut. Harvested area was cut by 600k to 86.5 million for a net 108 mbu larger production figure of 15.342 bbu. The average trade guess was to see 15.212 bbu going into the report. The extra corn availability led USDA to raise feed and residual by 25 and ethanol by 50. On net, ending stocks were 31 mbu looser to 2.162 bbu. The average trade guess going in was to see a 36.7 mbu cut, so the market was caught leaning the wrong way.
NASS counted 12.169 bbu of corn on December first, including 7.83 bbu on farm and 4.34 bbu off farms. With the 1.36 bbu of carry-in, and the updated production figure of 15.342, Q1 use was implied at 4.533 bbu. That compares to 4.215 bbu last year. The On Farm stocks number was the largest since 2010.
The global S&Ds from USDA led corn production 13.66 MMT higher, with 2.7 from U.S, -2 MMT from Brazil (@127 compared to 126.5 MMT expected) and 11.8 MMT to China – which is now projected at 289 MMT. Global export demand was trimmed on net by 570k MT, though domestic use increased from the Dec WASDE. On net world corn stocks were upped by 10 MMT to 325.22 MMT – the trade was looking for 313.8 MMT on average.
The Rosario Board of Trade hiked their estimate of the Argentine corn crop to 59 MMT. USDA made no change to Argentina, at 55 MMT.
The IGC raised their world corn production forecast 7 MMT to 1.23 billion metric tonnes. They had been well below USDA and that is still the case after USDA’s upward revisions.
Mar 24 Corn is at $4.42 1/2, down 15 1/4 cents,
Nearby Cash is at $4.17 7/8, down 15 1/8 cents,
May 24 Corn is at $4.54 3/4, down 15 cents,
Jul 24 Corn is at $4.64 1/4, down 14 3/4 cents,
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