The month of April was quiet, especially within the cash market.  Prices eroded as managed money has been selling the corn market amidst a big U.S. carryout and a growing global carryout.  Concerns regarding politics and implications that may arise from NAFTA will have potential influences on the market going forward. 

In the meantime, the April USDA supply/demand report was issued and no alterations to domestic ending stocks were made.  However, the demand allocation for corn was amended.  Corn used for feed demand continued to decline to 5.5 billion bushels, down 50 million from the previous month.  This projection has eroded since the October estimate of 5.650 billion bushels.  Additionally, corn demand into ethanol production has increased from October’s projection by 175 million bushels to 5.450 billion bushels in the April report. 

Export demand remained constant from the last report at 2.225 billion bushels.  Ultimately corn carryout is forecaste at 2.320 billion bushels, a 15.9 percent carryout-to-use ratio.  Global corn carryout increased in the April report from 220.68 mmt to 222.98 mmt.  This compares to 211.83 mmt last year and 209.82 mmt in 2014/15.  The increase this year was mostly due to higher production in Brazil and Argentina.

The chart illustrates the managed money position at the time of this writing and the corresponding nearby futures position.  Managed money was holding a short of near 197,000 contracts as of April 25.

Comments in this article are market commentary and are not to be construed as market advice