Corn continues to trade sideways and struggles to take out nearby technical resistance. The USDA numbers in the March 2015 WASDE report did little to change the current theme. The bulls' argument that exports could be bumped higher to a tune of 50 million bushels came to fruition, but the bears continue to offer caution regarding the more intense headwinds that U.S. exporters could soon be facing due to the continuing strength in the US dollar. The bulls are also talking about stronger than expected ethanol demand. On the flip-side, the bears saw corn used for ethanol production actually reduced 50 million bushels because the USDA's adjustment for the production ratio to take into account more efficient plant operations. From a global perspective, there's not a lot expected to change. They did give a little and take a little in South America, but net-net there doesn't look to be much in the way of significant change.
Here at home, some of the bulls continue to talk about conditions being too wet down south and the fact it might push planting dates back far enough that some of the expected corn acres won't get in the ground. The bears are saying the situation is over exaggerated and the warming temps and nearly perfect conditions up north could bring about more early field work and in turn more corn acres than some had been anticipating. Bottom line: It's early in the race and both the bullish and bearish traders are jockeying for inside position.
Here is a breakdown for corn from the March 2015 WASDE report:
- Corn used for ethanol lowered by 50 million bushels as the USDA sees a higher implied conversion rate than previously assumed.
- Corn used for feed and residual raised by 50 million bushels
- Corn used for exports raised by 50 million bushels
- Corn ending stocks lowered by 50 million bushels World ending corn stock lowered more than anticipated from 189.64 down to 185.28 million metric tons.
- World corn production lowered from 991.29 down to 989.66 but still slight above last years estimate. Biggest reduction in South Africa by 2.0 million tons.
- Argentine corn crop raised from 23.0 down to 23.5 million metric tons.
- The Brazilian corn crop was left unchanged at 75.0 million.