On 30th June, money managers reduced the net-long corn position based on the latest USDA Prospective Planting report data. The data revealed that the USDA expects corn plantings at 94.1 million acres, up more than 2 million acres from its March forecast and up 5.6 million acres from last year, largely surpassing the market players’ estimates of 91.8 million acres on the average estimate. Thus, the CBOT corn futures JUL-23 contract price fell to USc 488.4/56 bushel on 30th June, down 16.5% week-on-week and 8.8% month-on-month.
However, the large corn acreage figure was overshadowed by smaller-than-expected stock figures. As of 1st June, corn stock is at 4.106 billion bushels, below most trade estimates of 4.255 billion bushels and down 6% from a year earlier, according to the USDA. Thus, market players believe this could pose an upside risk to price action, as US corn stocks are looking rather tight, the second-lowest level in nine years.
Meanwhile, wheat stocks fell to 580 million bushels, also below the most trade estimates of 611 million bushels and the lowest for this time of the year since 2008. The heat and drought in the southern Plains could potentially reduce the production figures for this season and thus lead to even tighter ending stocks for the 2023/24 season.
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