Corn Market Update: Futures Fluctuate Amid Harvest Progress and USDA Report Anticipation
Corn futures have experienced a week of mixed trading, influenced by factors including harvest progress, weather forecasts, and anticipation of the upcoming USDA Grain Stocks report. Trading on Friday saw contracts close lower, while earlier in the week, there were periods of fractional gains. Market participants are closely monitoring cash prices and open interest as the harvest season progresses and the October harvest price for crop insurance is determined.
Corn Futures Performance
Friday saw front-month corn futures post losses, with December contracts down 2 to 3 cents, bringing the weekly decline to 3 cents. The CmdtyView national average Cash Corn price also decreased, settling at $3.76, down 2 1/4 cents. Earlier in the week, trading displayed some volatility. Near the week's open, futures showed fractional losses while contracts further out (September '26 and beyond) gained slightly.
- Dec 25 Corn closed at $4.21 3/4, up 5 1/4 cents, currently down 1/4 cent
- Nearby Cash was $3.78 1/4, up 5 1/2 cents,
- Mar 26 Corn closed at $4.38, up 5 1/4 cents, currently down 1/2 cent
- May 26 Corn closed at $4.47 3/4, up 5 cents, currently down 1/2 cent
Harvest and Weather Impact
Harvest progress appears to be exerting downward pressure on prices. The prior week saw largely favorable conditions, allowing for uninterrupted harvesting. The upcoming week's weather forecast is for spottier rainfall. Earlier in the week, forecasts anticipated light rainfall potentially slowing harvest in the ECB, with some precipitation expected in parts of NE, IA, and the Dakotas. This can influence overall supply and price dynamics.
USDA Report and Export Activity
The market is keenly awaiting the September 30 Grain Stocks report from the USDA. Analysts surveyed by Bloomberg are anticipating a report showing 1.336 billion bushels of corn on hand as of September 1, with estimates ranging from 1.26 to 1.45 billion bushels. Traders are particularly interested in any surprises within the feed and residual category. Recent export inspections showed strong performance, with 1.527 MMT (60.12 mbu) of corn shipped during the week of 9/25, exceeding both the previous week's volume and the same week last year.
Commitment of Traders Report
The Commitment of Traders (COT) report from Friday afternoon indicated that managed money added to their net short position in corn futures and options as of September 23, increasing the position by 14,624 contracts to -94,675 contracts. This was largely driven by long liquidation. Conversely, commercials reduced their net short position by 10,692 contracts to 97,598 contracts, mainly through an increase in long positions, suggesting hedging activity by end users.
Yield Estimates and International Factors
S&P Global has revised its estimate for the US corn yield downward to 185.5 bushels per acre (bpa), a reduction of 3.6 bpa from the previous month. This results in an estimated production of 16.707 billion bushels (bbu). In Brazil, the planting of the first corn crop in the center-south region is reported to be 32% complete as of Thursday, according to AgRural. Monitoring international planting progress is crucial for understanding the global corn supply.
