Weekly Outlook: A Weather Market for Corn in 2016?

On the supply side, domestic corn production has been large for three consecutive years and the USDA now projects 2015-16 marketing year ending stocks of U.S. corn at a 10 year high of 1.837 billion bushels. While those stocks represent a modest 13.6 percent of projected marketing year consumption, they are considered ample in light of prospects for another large South American harvest and projected foreign year-ending stocks of coarse grains that are nearly 40 percent larger than stocks of three years ago. Demand for corn has been weakened by sluggish domestic and global economic growth. Demand has been further weakened by the relatively strong dollar. U.S. corn exports during the current marketing year are now projected at only 1.65 billion bushels, 200 million bushels less than projected last fall. In addition, growth in domestic corn consumption is limited by plateauing ethanol production, slow growth in livestock and poultry production, and weak livestock prices.