Global Supply of Corn in Position to See Tightening

March 27, 2018 9:20AM CDT

With dryness in Argentina for the next week or so, there is uncertainty for the Brazil crop and more and more talk of smaller planted area for the US; the market seems to be in position to make a turn back higher.  Early strength yesterday was tied to disappointing weekend rains in Argentina with a dry forecast for the next 7-10 days.  Many are getting the feeling that the rains may be a little too late with estimates starting to slip below 30.0 million tonnes.  Chinese corn imports in February reached just 102,600 tonnes, down 28% from last year and down 392,200 tonnes in January.  However, China imported the most ethanol in February since May of 2016.  China’s shift to a 10% ethanol mix means their corn usage could increase 24-29 million tonnes by 2020.  With planting intentions and March 1 stock report on Thursday, some traders will move to the sidelines.  Resistance comes in at 377 and 382 with support at 370 and 367.

Corn May '18 Daily Chart


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