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Commentary
Today’s WASDE report that is usually considered a yawner by the trade was anything but boring. It was a bullish surprise for corn as ending stocks came in at a surprising 1.738 billion bushels vs an average trade guess of 1.906 billion bushels. USDA made two balance sheet changes including raising ethanol 50 million bushels, and exports 150 million bushels, which resulted in the more significant than expected drop in US ending stocks. Usually, adjustments of this magnitude don’t come until the January report, but USDA were aggressive in their increase of exports perhaps dispelling the front loading of exports into Mexico for example that has been the “noise” within the trade on supply vs demand. World 2024/25 carry-in was up two million tonnes this month with production down 1.5 MMT (small reductions in the E.U., Mexico, and SE Asia). Overall corn ending stocks were down a sharp 8 MMT due to that US demand increase and a 2 MMT drop in Chinese imports. Technically, March Corn prices have moved higher heading into the report and have now surpassed the November highs of 447 ¾, closing today at 449. The fall high made in early October is 452 1/4 and longer-term 200-day moving average resistance stands at 451 1/2. March is now up more than $0.20 since the late November low. The 50% retracement resistance from the summer highs to the August lows stands at 456 and prices may struggle to sustain any rally above that level as long as weather in South America remains favorable. That said if prices take out the 50% retracement look for 466 and 471 to be tested. Support is down at 440, a close under and its back to 424.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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