Corn Futures Adjust to Brazilian Supply & Weak US Economy

Even as the temperatures heat-up in the Mid-West, corn futures fell on the outlook future corn demand will be weak because of a record Brazilian corn harvest (adding to high inventories) and slow US economic growth.  There is major data conflict in the corn futures market with prices so high.

USDA officials are now saying the world corn stockpiles for the 2012-2013 season will almost double from recent estimates because of Brazilian and US record corn harvests.  Just to think corn futures had been up 12% in just the past three trading sessions…

Kevin Craney, a senior commodities broker with RJO Futures in Chicago, stated today in an e-mail interview regarding the current corn futures situation, “The grain markets continue to be driven by weather despite disappointing macroeconomic data.  With a frontal system moving across the Midwest today a few areas of the corn belt received some moisture, however, it was not the soaking rain that is desperately needed in some areas.”  Craney added, “The 6-10 forecast models continue to call for warm and dry weather and this should help support corn (futures).”

Corn futures have just rolled over into a technical up-trend in my work this week, but now I expect more sideways action near-term.  Patience is still best with this market.

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