June 22—The corn market was volatile during May as new money found its way into the market as the dollar broke, crude oil rallied and the USDA decreased carry-out. The soybean market was another culprit as to why the corn market continued its fast pace rally. Nearby corn futures traded a 40.5 cent trade range in May, while soybeans traded a $1.56 range.

With the rally that was experienced in corn, many end-users, such as the swine and dairy industries, suffered even more negative margins.

According to the USDA, old crop carry-out rested at 1.6 billion bushels while new crop carry-out leaves potential concern with just a 1.09 billion bushel carry-out. The new crop scenario is still using the 85 million planted acres figure, which will be tested on June 30th. The latest yield estimation is 153.4 bushels per acre compared to 155.4 bushels per acre in the May report and 153.9 bushels per acre a year ago. The ethanol sector is expected to consume 4.1 billion bushels of corn next year compared to 3.75 billion bushels a year ago. Feed demand is the limiting factor, with demand estimated at 5.15 billion bushels versus 5.35 billion bushels a year ago.

One thing to note as July approaches is the planting intentions, quarterly stocks and quarter end (impacted by the fund traders). The adjacent chart illustrates the changes from the March to June planting intentions. The 2009 bar indicates an estimated reduction of one million acres from the March report.