CBOT corn falls as farmers accelerate sales due to rainfall in Argentina

Chicago, January 16th News: On Thursday, corn futures on the Chicago Board of Trade (CBOT) closed moderately lower, with the benchmark period closing about 0.9% lower, as Argentine agricultural regions will experience rainfall and farmers accelerate their selling pace.

As of the close, corn futures fell by 2.75 cents to 6 cents, with the March futures dropping by approximately 4.25 cents to close at 474.50 cents per bushel; The May period fell by about 5 cents, closing at 483 cents per bushel; The July period fell by about 6 cents, closing at 486 cents per bushel.

The most active trading range for March futures is between 473.25 cents and 479 cents.

Some analysts say that the improved rainfall outlook in Argentina has triggered speculative funds to take profits. Chicago corn futures hit a one-year high on Tuesday, reaching $4.7975 per bushel.

The weather forecast shows that Argentina will experience rainfall over the weekend and temperatures will slightly drop next week, which may alleviate the pressure on corn crop growth in the world's third-largest corn exporting country.

In recent weeks, speculative funds have expanded their net long positions in the CBOT corn futures and options market, making the market vulnerable to the impact of long liquidation.

StoneX company stated that in recent days, the sales volume of farmers has been high, leading to a significant decrease in basis quotes, and speculative funds seem to have just realized this.

The weekly export sales report released by the US Department of Agriculture shows that as of the week ending January 9, 2022, the net sales volume of corn in the United States for 2024/25 was 1024200 tons, significantly higher than last week but on par with the four week average. This data is slightly higher than market expectations.

The one-day export sales report issued by the U.S. Department of Agriculture shows that private exporters report that they have sold 135000 tons of corn to Taiwan, China Province of China, and delivered them in 2024/25.

The latest report released by the International Grains Council (IGC) shows that the global corn production forecast for 2024/25 has been lowered to 1.219 billion tons, a decrease of 6 million tons from last month's forecast, mainly due to the lowered production forecast for the United States.

The largest agricultural group in Argentina is demanding that the government provide tax breaks for the industry. They stated that due to dry weather and low crop prices, the industry is in a critical situation.

The US Climate Prediction Center stated that the La Ni ñ a phenomenon has already occurred and there is a 59% chance that it will continue until April. However, the current La Ni ñ a phenomenon is relatively weak.

The Rosario Grain Exchange expects Argentina's corn production for 2024/25 to be 48 million tons, lower than the previously predicted 50-51 million tons.

On Thursday, the estimated trading volume for the benchmark period was 193073 lots, compared to 198492 lots on the previous trading day. The short position is 722959 lots, compared to 717966 lots on the previous trading day.