Corn Futures—Corn futures in the May contract skyrocketed higher finishing limit up $0.25 at 5.64 a bushel as the crop report was construed extremely bullish so look for higher prices tomorrow on the open as the contract high and multi-year high will be touched once again.
If you have been following my previous blogs you understand that I had a bearish bias towards prices, but I was not involved as I don’t like to go into reports as anything can happen just like what happened today as I will continue to sit on the sidelines, however if you are long a futures contract I would stay long as we broke out of tight 9-week consolidation pattern.
Corn prices are trading above their 20 and 100 day moving average as the trend continues to flip flop, but that report will probably send prices near the $6 level in the coming days ahead. Spring planting is right around the bend as the volatility certainly is going to continue to be very high so make sure you place the proper amount of contracts risking only 2% of your account balance on any given trade.
Fundamentally speaking the USDA reported quarterly corn stocks at 7.701 bbu on March 1st. That is below the trade average guess of 7.77 bbu, and down 251 mbu from last year’s stockpile. This implies Q2 demand at 3.621 bbu or 32% of supply. In Q2 of 2019/20 implied demand was 3.375 bbu for 30% of supply.
For new crop, USDA reported 91.1 million acres intended for corn. The average pre report guess was to see 93.13 million, and the Feb Outlook Forum’s 92 million acres. Last season USDA reported 96.99m acres intended for corn in March, with the final planted acreage ending up at 90.82m.
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