Dire Predictions Materialize
Following the USDA report, corn futures took a nosedive, with contracts plunging anywhere from fractionally to 5 ½ cents on Thursday. The abrasive shift pushed prices to near the closing lows, leaving investors in a state of distress.
Export Sales Reveal Signs of Struggle
The morning’s Export Sales report painted a bleak picture, with old crop corn bookings down to a mere 325,479 MT for the week ending on April 4. This marked a drastic 65.7% decrease from the previous week, hitting a Multi-Year low. Leading the downtrend were Japan, securing 221,100 MT, and South Korea, in for 139,400 MT. Notably, significant net reductions of 261,700 MT were reported for unknown destinations, hinting at a major shift in trading dynamics. New crop sales fared no better, settling at a disappointing 9,500 MT.
USDA’s Insightful Projections
The USDA’s WASDE update unveiled a troubling 50 mbu cut to the US carryout figure for 23/24, attributed to a 25 mbu increase each in FSI and feed & residual. Despite these adjustments, the ending stocks remained substantially high at 2.122 billion bushels, surpassing the average trade estimate. Global stocks were also under pressure, reduced by 1.35 MMT to 318.28 MMT, largely influenced by the tighter US statistics. Argentina saw its production diminished by 1 MMT to 55 MMT, while Brazil’s output stayed untouched at 124 MMT. Meanwhile, the Buenos Aires Grain Exchange made a significant downward revision of the Argentine total by 2.5 MMT to 49.5, while CONAB drastically scaled back its estimate for the Brazilian crop by 1.8 MMT to 110.96 MMT, resulting in a staggering 512 million bushel variance between the two countries.
The day concluded with May 24 Corn at $4.28 3/4, a startling drop of 5 1/2 cents, while Nearby Cash settled at $4.10 1/4, down 5 1/8 cents. Jul 24 Corn closed at $4.41, down 4 3/4 cents, and Dec 24 Corn at $4.66, a decrease of 4 1/4 cents.
New Crop Cash stood at $4.29 5/8, down 4 1/4 cents.
As of the publication date, Alan Brugler had no financial stake in any of the securities referenced in this article. All provided information is for informational purposes only. Refer to the Barchart Disclosure Policy for more details.
The sentiments and perspectives articulated in this piece belong solely to the author and do not necessarily mirror those of Nasdaq, Inc.
