WASDE came out with its monthly Supply & Demand report today, and confirmed that the corn yield of the corn crop did increase. The yield on the month to month report showed an increase from 173.4 bushels per acre to 175.3, which was the high end of the estimates. Carryover is larger also. It went up from 2320 million bushels to 2403.
The demand side of the equation is going to have to hold or get better in order to use the large supply. To be competitive, prices will have to work lower. Hopefully we will see increased demand from other countries. We have now shipped corn to Brazil fir the first time since 2002. They have approved over GMO variety for feed consumption. Time will tell whether other countries will increase their purchasing.
With the increase in supply, Corn could go down to the mid 330 area.
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Senior Market Strategist
Gerry has more than 30 years of experience as a licensed stock and commodities broker. His background includes working with Swift Henke in back-office operations; H. Hentz, where he handled the stock order desk; Drexel Burnham, where he helped set up the commodities operation in Chicago and did business with commercial and retail clients; and Smith Barney, where he served commercial and retail customers. Prior to joining RJO Futures, Gerry worked with retail and commercial hedge customers at MF Global.