CBOT corn futures jumped as much as 12.25 cents/bushel higher Thursday, reacting to a bullish harvest survey report the same day from Conab, the Nation Supply Company in Brazil.
The Thursday report showed second-crop Brazilian corn production at 43.053 million mt, down 6.942 million mt, 13.89%, from June's forecast of 49.995 million mt. The projection is 21.1% lower than the 2014-15 marketing year's production of 54.59 million mt.
Brazil is the second largest global corn exporter and major US competitor in the global corn market.
Initial reactions to the report cooled as the morning progressed and the CBOT contract calmed to just 2.25 cents higher at 10:45 am CDT.
"We've seen a retracement already, so I'd say that [the report] is mildly supportive," said one source.
The front-month CBOT corn futures contract settled at $3.3575/bu Wednesday.
The lower corn production is likely to alleviate Brazilian export storage capacity worries later in the year. Corn and sugar compete for space in export terminals and Brazil expects a large sugar crop in 2016. S&P Global Platts estimates 36.4 million mt of sugar in the 2016/2017 Center-South crop, up 5 million mt from the previous crop.
Thursday's movement was a departure from the bearish motions of the previous two weeks that have seen corn has plunge 23.3% from a peak of $4.3775/bushel on June 17. Weather forecasts shifted from hot, dry weather that would damage the corn plant to mild temperatures and rain.
Corn-market participants have abandoned long positions in favor of short ones in response to higher forecast yields in the US, but the lower yield in Brazil supported hopes of additional US exports.
The rebound in corn prices pushed US ethanol prices higher as well, with the benchmark Chicago Argo product heard within a bid-offer range of $1.57-$1.59/gal for prompt delivery. Platts assessed Argo at $1.5675/gal Wednesday.
