Afternoon Corn: Slightly bigger acres, slightly lower stocks

Report day is finally in the books, and it turned out to be a spread mover. Old crop futures responded positively to the lighter quarterly stocks numbers; May finished 11 cents higher and July gained 8 &frac34;. New crop was weighed down by higher acreage intentions; Sept finished one-half cent better, Dec one-half cent worse. The official weekly corn chart will reflect gains of 17 &frac12; cents and is the third consecutive week of positive returns. Cash trade was mixed on the interior and steady at the Gulf.

Today's double-header of reports featured a couple minor surprises for corn. Acreage intentions arrived at the very high-end of forecasts, pegged at 92 million acres, versus roughly 91 million expected and well above 2022's final tally of 88.6 mil. This is obviously bearish for new crop, particularly if the USDA's trend-line yield if 181+ bpa can come to fruition. Bulls will correctly point out that not only do you have to plant it (national progress has barely begun), but we will also have to grow it. State-by-state gains were broad-based; only Nebraska and Texas featured meaningful yr/yr reductions. Big percentage gains in the Deep South and Delta? Quarterly Stocks (a/o March 1st) meanwhile were below expected at 7.40 billion; the average analyst guess was 7.47 billion, and it compares to 7.76 bil in storage the same period last year. The idea of slightly more snug old crop carryout helped support the bull spreads today. Disappearance for the quarter was implied nearly 12% below Dec-Jan-Feb of 21/22.

The CFTC is back to being current on their weekly Commitment of Traders data. For the week ended 3/28, the supplemental report found modest Large Spec short-covering, which was broadly expected. Commercials were the main offsetting seller, index (or long-only) traders were near flat, and small (non-reportable) traders were also modest net buyers (+5,630 contracts). When including recent activity, we think funds are heading into the weekend net short around 25,000 delta-adjusted corn contracts.

Elsewhere, for the first time this week, there were no fresh 8 AM sales reported. Much of China's buying this week should show up in next Thursday's sales report. 6-10 day NOAA maps are dry in the Western Corn Belt, while the 8-14 day map is drier for both, which should cheer up farmers (temps remain a little chilly?). Heavy snowpack in the Upper Plains could still cause some heartburn, as well as continued drought in the Southern Plains? End-user markets were mixed; cattle and ethanol had good weeks (ethanol ripped 7 cpg higher post-USDA today?), hogs continued to struggle, and milk was somewhere in-between. Outside markets also had a good week; crude and equities higher, and the US Dollar was slightly weaker.

In the options, volatility featured its normal post-report beatdown. Pre-report, the May $7 Call was popular, trading 2,000 times at around 2 &frac34; cent. Post-report, 1,400 of the short-dated May $5.90 Calls were traded at 4 cents? Calendar spreads were very firm; new highs for the K/N. Corn lost to the beans but was mixed versus the wheat. On the charts, May Corn ended the day right into resistance in the $6.60 area. Getting close to the old Jan-Feb trading range? Support moves up to $6.35. May Corn is getting a little overbought with the RSI creeping over 70 for the first time since January. New crop parameters are roughly the same post-report; resistance was confirmed at $5.75 CZ. Major support remains near recent lows in the $5.50 area, and as expected there was some short-covering seen today down around $5.60. The post-report lows of $5.58 will also be an area to watch in the short-term for some initial support.