Bigger Crop in India a Drag on Corn Futures

An Indian corn-industry group claims corn exports for their country can reach a record this year as farmers increase corn plantings after ample monsoon rain precipitation last month.  They predict their corn will be cheaper for their neighboring nations than Western Hemisphere supplies.

Last year, corn exports from India were 4.8M tons, but in the 12-month period from April first corn shipments are expected to top 5M tons.  Corn futures are already in a bear market and rising Indian supplies may add to a “global glut” with corn production expected to rise by nearly 12% (according to the USDA).
           
Corn was higher, with new crop prices leading the way.  In my opinion, speculation of hot and dry weather in the next week or two created fears of drought,” said Mason Ching, Automated Trading Manager, Global Futures Exchange & Trading Company in Encino, CA, regarding the current corn futures situation.  Ching added, “In contrast, long range forecasts do not show any heat or dryness. July Corn (futures) was stronger due to tight cash markets as basis levels were very strong.”

Although the overall trend in corn futures remains down, this market has been trading “sideways” for more than a month now.  I am incline to continue pressing the “short-side” of corn futures throughout the rest of the year.

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