Will the corn rally continue?

By Jon Scheve

The USDA released their updated supply and demand estimates after the stocks report nearly two weeks ago.  Carryout was tighter than many in the trade were expecting. I was anticipating a more significant decrease in corn used for animal feed to offset any export increase. With what we know today, most in the trade seem to find the increased exports number reasonable.

I feel that the decreased carryout should have caused corn to rally at least 10 cents immediately after the report was released; however, it only went up a few cents. And while it did close another 7 cents higher on Friday, I thought it would have been a lot more. Friday’s rally was probably due to the dropping of the U.S. dollar, making U.S. exports more affordable globally.

I was also surprised the May to July spread didn’t tighten up and instead widened more than before the report. If supply is as tight as the USDA suggests, the spread should have narrowed as end users look to shore up more supply. This… Continue reading