It is generally thought that the December report does not make much of a wave in the markets. For once, things turned out as expected.
USDA raised corn carryout slightly to 832 million bushels. This is 5 million bushels more than the number they put out in November. Of all places, this increase to carryout came from raising corn imports 5 million bushels. That takes a very small number on the balance sheet and increases it slightly. Imports were 10 million in the last report and are now 15.
Fundamental Support: Corn this week rose 20 1/2 cents. Big support came from the rocketing wheat market, further talk that China needs to import corn next year, and partially from Argentine corn concerns. Looking ahead to next week, we do not look for a major change to USDA’s balance sheet. They traditionally wait until January to adjust production numbers. That leaves us arguing about ethanol and exports. We will release our numbers on Monday.
The highest close of the corn uptrend was reached today. It is oddly interesting to note this was the highest close since September 26, 2008.
That is almost two years ago. Of course, at that level, the market was on its way down from June highs.
Corn: We are not interested in picking apart why exactly today’s big move was seen. It is simply another day in a massive rally. The primary driver of price remains perceptions of yield falling to 160. Today’s secondary stories were simply like throwing matches on a burning fire. There was a rumor that Credit Suisse devoted $1 billion to grain commodities overnight. The Chinese are saying they will have a frost in key growing areas. Canada was also highlighted with frost concern.
Watch Sunday night markets.