15 February 2013 23:19 [Source: ICIS news]
HOUSTON (ICIS)--For the first time since the end of January, the price for March corn futures closed up, ending its longest downward skid since July 2007.
Corn rose 4 cents to close at $6.98/bushel (€5.24/bushel) to break a 10-day continuous decline. Corn still posted a loss of 1.4% for the week.
Agricultural analysts said that the commodity was due for rebound, as there is still demand for physical corn and supply remains tight, as well as signs that the market had been pushed into technically oversold levels.
There is also the ongoing issue of drought in Argentina’s main corn producing region, and although the forecast is for improved rain conditions over the weekend, it is not expected to alleviate the situation facing farmers in that country.
Until the recent downturn in February, corn futures had responded positively to the 11 January release of the World Agricultural Supply and Demand Estimate by the US Department of Agriculture, which had stated that the domestic corn stock numbers had decreased as a result of the pervasive drought conditions experienced in 2012 throughout a majority of the growing regions.
Additionally, analysts have been predicting since the start of 2013 that US farmers are going to be focused on filling their acreage with corn. The analytical firm Informa Economics has estimated projected plantings as high as 99.3m acres. That would mark a rise by 2.4m acres from 2012 and would be the largest corn crop ever sowed within the country.
Even the government is viewing the potential for the crop as being massive, as last week the Congressional Budget Office released projections that producers will plant 97m acres that will yield a 14.5bn-bushel corn crop.
The prospects of the enormous crop has kept fertilizer producers eagerly anticipating the refilling season, as ammonia and urea products are the primary nutrients for corn. Sources have continued to point toward the commencement of planting as the spark these markets need to get end-user demand and prices rising as well as movement of fertilizers going forward.
($1 = €0.75)
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