Traders are preparing for a very large corn carryout number in the May Supply and Demand report from USDA. “The corn numbers are going to be bearish and even shockingly bearish,” says Joe Vaclavik, president, Standard Grain. “In May, the USDA gives us the first look at the 2021 balance sheet for corn. They’ll use the March planting intentions report at 97 million acres and use a sharply reduced ethanol demand number because of the situation.” Using trend line yields, corn carryout is expected to be more than three billion bushels. Vaclavik says the big question is how much of that traders already have dialed into the market. “This will be one of the ugliest reports we’ve seen. However, just because we get an ugly report doesn’t necessarily mean the markets have to go lower. The game is trying to figure out what’s priced in and what’s not.”
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