Corn continues to trade in a fairly narrow range as the market debates delays in planting, geopolitical trade risk and traditional supply and demand. Bears continue to point towards uncertainty surrounding geopolitical trade negations.
Personally, I keep hearing that we are inching closer to a NAFTA deal but there's still no real confirmation. I suspect if we can get the NAFTA headline risk behind us, the market will at least feel like it has more upside potential. Bulls continue to talk about strong demand. U.S. weekly corn export sales were reported in the range of expectations at just over 1 MMTs for 2017-18.
As for production, the South American crop could use a bit of rain in a few areas, but overall their second-crop acres seem to be doing fairly well, especially in the highly productive region of Mato Grosso. I still feel like the USDA will ultimately have to trim their current Brazilian production estimate.
I also believe the USDA still has a bit more to trim from their Argentine estimate. As for here at home, bulls continue to point to difficult weather conditions across the central and northern Midwest. Bears point to the fact U.S. producers have the technological capabilities to get the crop in the ground in a narrow window of time, and there is still plenty of time on the clock.
As you can see from the graphic I included below, several weather guru's are forecasting a warming period. As a spec and a producer, I think the risk in the South American crop has already been well advertised and traders are looking to the U.S. for fresh new headlines.
I think it's too early to be in a U.S. weather market, so perhaps we are in a bit of a vacuum or as I have suggested a lack of fundamental headlines. The only real "wild-cards" at the moment seems to be the mixed-bag coming out of Washington. I remain a longer-term bull, but believe the market may have gotten a bit ahead of itself and now needs to circle the wagons for a moment.