FORT COLLINS, (Colo.): Thursday capped off the 15th and final trading day of 2021 featuring one of the US Department of Agriculture (USDA) reports that have sparked extreme volatility for Chicago corn and soybeans over the last year or so.
While the impact was calm as expected this month, a potentially chaotic day looms just a few sessions into the New Year.
Most of the report surprises since last year have been rooted in the global drawdown of grain and oilseed supplies, partially driven by two straight years of short US corn and soybean production. That, among other factors, has caused analysts to periodically misjudge US and global inventories.
US corn and soy supplies by next August are seen rising from the previous year’s levels but remaining below recent averages. That is supported by a record US corn yield forecast, which makes the recent trend in CBOT corn futures unique.
Most-active corn on Thursday settled up 0.8% at $5.91-3/4 per bushel, the contract’s highest finish on USDA report day since June 10. It is uncommon for corn futures to build in the second half of the year when US harvest expectations rise from the first survey-based estimate in August.
The last few years have been mixed in terms of corn yield changes from November to January, but last year’s unusually large yield cut in January spurred the first of several limit moves in futures in 2021. An unprecedented miss in US corn stocks also played a large role.
USDA’s January data dump is due Jan. 12 and will highlight US corn and soy production, US quarterly stocks and potential changes to the prior quarter’s stocks, US winter wheat seedings, South American production and other global supply and demand.
USDA reports are notorious for potentially quashing market narratives, and that often works against bulls. But corn optimists struggled less than usual this year when it comes to price freefalls.
CBOT corn’s worst report day of 2021 was Oct. 12, when most-active futures fell 2%, the ‘best’ worst outcome in more than 16 years. One of the biggest corn losses in recent years was 6% on Aug. 12, 2019, as analysts were blindsided by the US crop outlook.
Corn futures gained 7.3% on June 30 when US acres and stocks fell short of predictions. That was the biggest by percent since the same report in 2015, and that day featured the third limit-up corn move on report days in 2021, though there were a handful of other sessions where limit moves also occurred.
Although corn futures did not fall by large degrees on 2021 report days, the most-active contract settled lower on six of the 15 days versus four in 2020. Eight reports in 2019 were associated with corn price declines.