Weak Weekly Export Inspection Report Hurt Corn


Feb. 9 2016, Updated 6:51 p.m. ET

Corn prices fell

Corn futures prices on the Chicago Board of Trade (or CBOT) for March expiry fell by 0.96% and settled at $3.62 per bushel on February 8, 2016. Corn prices dropped on cues of weaker export inspections for the export sales in the near term. The Teucrium Corn Fund (CORN) traded on the heels of CBOT and declined by 0.84% on February 8, 2016.

Weekly reports from the US Department of Agriculture for the Grains Inspected or Weighed for Exports were released on February 8, 2016. The corn weekly inspections were 438,560 metric tons for the week ending on February 4, 2016. Weekly inspections are 39.7% lower from the last week and 38.6% lower than the previous two-week average. The year-to-date corn export inspections were 12.4 million metric tons, which are 20.9% behind inspections the year before. The speculations of lower corn export sales drag prices down due to higher export competition on February 8, 2016.

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Ukraine increased its grains export outlook to 37.0 million tons on February 8, 2016. The projected corn export sales from Ukraine are at 16.7 million tons now. The increase in the corn export sales from Ukraine could raise the US corn export sales competition in exports markets. The speculations of reduction in the export sales dragged corn prices down on February 8, 2016.

The US Department of Agriculture suggested that corn production for the marketing year 2015-16 from Ukraine could remain at 23.2 million tons, approximately 18% lower than the marketing year 2014-15. Speculation of lower-than-anticipated production from Ukraine might support US corn prices.

Stock discussion

The decline in corn prices hurts corn producers and traders. Bunge (BG), ConAgra Foods (CAG), and CHS (CHSCP) fell by 1.7%, 0.66%, and 0.52%, respectively, on February 8, 2016, with the drop in corn prices. However, Tyson Foods (TSN) rose by 5.3% on the day. The PowerShares DB Agriculture Fund (DBA) fell by 0.70%.


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