Evening Corn: Sluggish Demand News Last Week; Bullish Weather This Week
The Argentine forecast is bullish with almost complete dryness for the next two weeks while Southern Brazil is dry for another week. March corn closed sharply higher on the session Monday as the dry weather could cause further reductions in production for Brazil and for Argentina, and this could slow South America exports and improve exports from the US. Ideas that increasing exports could offset some of the lower demand coming from China due to their revisions higher in production from last summer helped to support. Meal in China jumped 8% after the week vacation and this shows strong feed demand. Corn export inspections for the week ending February 3 came in at 1,053,202 metric tonnes as compared with trade expectations for 975,000–1.3 million tonnes. Cumulative inspections year-to-date are 18,597,272 metric tonnes which is 13.9% below last year. This is 30.2% of the USDA's forecast for the 2021-22 marketing year versus the five year average of 32.8%.
For the USDA February supply/demand report, traders see corn ending stocks near 1.512 billion bushels, 1.420-1.560 range, as compared with 1.540 billion bushels last month. World ending stocks are expected to come in near 300.32 million tonnes, 294.30-303.00 range, as compared with 303.07 million tonnes in January. Brazil production is expected to come in near 113.63 million tonnes, 111-116.1 range, as compared with 115 million tonnes in January. Argentina production is expected near 52.16 million tonnes, 51-53.5 range, as compared with 54 million tonnes in January.
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TODAYS MARKET IDEAS
The weather forecast is bullish. March corn support is at $6.26 1/2, with $6.42 ½ and $6.54 ¾ as next resistance. On the weekly continuation charts, $6.31 ½ is support with next key resistance at $6.65 ¼. December corn posted a new contract high with close in support at $5.74 ½, with $5.86 and then $5.99 as next upside targets.
