Each Friday over the past three weeks December corn futures closed lower. These lower weekly thresholds have come despite a very good export pace.
USDA projects this marketing year U.S. corn exports will top two-point-four-billion bushels. So far that doesn’t look too bad says University of Illinois Agricultural Economist Todd Hubbs, “We are definitely on pace. We’ll above last year’s pace, but everybody needs to remember we got off to a sluggish start last year and it really picked up in the second-half of the marketing year. We’ve seen a little bit of weakness recently, but we are still within the 2.45 billion bushels in my opinion.”
Hubbs is okay with USDA’s corn-used-to-produce ethanol figure, too. Although he says that’ll depend on ethanol exports as plant margins are really tight. He’s hopeful the corn-used-for-feed number will look better in January. That’ll depend a lot on the December Grain Stocks report. Still he says, “Right now, from the November projections, we are on track. There is a lot of uncertainty left in that. But when we look at the corn prices over the last few weeks, it is definitely related to the soybean prices and the bearishness in the (crude) oil market. I think both of those things are holding down corn prices.”
Not that if those two items were solved corn would rally substantially. It would come up, but still be capped by the available supply and some thought that USDA’s export target is a bit robust. Todd Hubbs thinks of it this way. The market has a done a good job of front loading U.S. corn exports and it is very unlikely the second half of the 2018/19 marketing year will be a repeat of last season’s stellar pace.