Corn bulls were happy to see better-than-expected weekly U.S. export sales, but keep in mind we are still running well behind our traditional pace and getting ready to enter a period of time where both Ukraine and South American corn will be cheaper. The only real good news I can see on the export front is that most sources believe by early March, U.S. exporters will fall back into favor. But until then the bullish export headlines might start to become fewer and farther between.
There's also some talk traders might be a bit more nervous with rumors of the EPA being about ready to release their final mandate numbers. If you recall, the trade is thinking the current 14.4 billion bushel mandate will be lowered to somewhere between 13.0 and 14.0 billion bushels. Bulls are saying, with the USDA already forecasting 5.15 billion bushels in ethanol usage, which is equal to about 14.0 billion gallons of production, does a 13.5 billion gallon mandate really mean anything? In other words the EPA mandate ruling might fall on somewhat deaf ears or have only a short-term knee-jerk type reaction.
From a technical perspective, many are looking for resistance in the MAR15 contract up near $4.01 with nearby support somewhere between $3.60 and $3.70. Producers who have seen major gains in the basis may want to take advantage of the situation by locking some in.
Keeping our eye on bird flu
A second outbreak of "bird flu" was discovered on a Dutch farm this week (announced yesterday), prompting another 40,000 chickens to be destroyed. This is on top of the 150,000 plus birds destroyed last week. Keep in mind the virus has also now been discovered on farms in Germany and Britain.