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WEEKLY CORN REVIEW: Options Expiration Deflates Corn Expectations

The first of March marks the beginning of spring, at least for weathermen. But the market has a cold chill about it as the calendar turns. Consider what happened last week:

• USDA abandoned its forecast for 2009 acreage growth, but still says farmers will plant about the same amount of corn as last year, keeping carryout more than adequate.
• The CFTC said total futures and options open interest in corn dropped by some 133,000 contracts after expiration of March options, a bearish force that's ratcheted down the rally targets in my forecasting model substantially.
• Exports, which had begun to pick up the last few weeks, took a sharp nose-dive in the latest week.
• Deliveries against March futures on first notice day topped 3,600 contracts, a very heavy total.
• March futures went into delivery right back around the $3.50 level that's served as the market's center of gravity for the past two months.

Oh, and the stock market made new lows too on Friday, raising more worries about demand. To read Bryce Knorr's complete weekly corn review, click HERE.