Accelerated planting in the US and rains in Ukraine increase pressure on corn prices

Corn prices have recently been rising amid speculative rise in wheat prices, but they were somewhat reduced by the intensification of planting in the US and harvesting in Argentina, as well as precipitation in Ukraine.

According to NASS, in the United States as of may 26, corn planted 83% of the planned area (70% a week ago, 89% last year, 82% on average for 5 years). Due to the warm weather with periodic rains, the seedlings were obtained on 58% of the area, which corresponds to the 5-year average.

Yesterday on the Chicago stock exchange, the July corn futures fell 0.5% to 182,1 $/t (+1% for the week, +3% for the month), and December – 0.6% to 191 $/t (+0.7% and 2.7%).

Wheat prices on Euronex have increased by more than 30% in two months. Against this background, the August corn futures rose by 9.7% to 227.25 €/t or 246.3 $/t during the month, and the November futures – by 12% to 230.25 €/t.

Yesterday’s increase by the Agency MARS forecast corn yields in the EU from 7.57 to 7.59 t/ha (7.34 t/ha last year) slightly cooled the quotes.

Experts of the UGA due to the reduction of corn planting areas to 3.809 mln ha and the lack of precipitation in some areas lowered the forecast of corn production in Ukraine in 2024/25 MY by 0.8 mln tonnes to 25.5 mln tonnes (29.6 mln tonnes last year), and exports – to 20.5 mln tonnes (26 mln tonnes in 2023/24 MY).

As of May 24, Ukraine planted 3.81 mln hectares of corn, or 95% of the planned area. The rains that took place yesterday and will continue for another 2-3 days will replenish moisture reserves and contribute to the development of crops. Low temperatures and further precipitation will allow farmers to increase their sowing areas.

the Purchase price of corn in Ukraine for the week fell by 3-5 $/t to 178-180 $/t or 8100-8200 UAH/t with delivery to the ports of the black sea, and producers have reduced supply in anticipation of price recovery. Prices for feed wheat increased by another 4-5 $/t to 190-192 $/t or 8600-8800 UAH/t due to strong export demand, which keeps farmers from selling corn.

In 2023/24 MY, Ukraine exported 25.82 mln tonnes of corn, including 2.92 mln tonnes in May 1-27, while last year the exports amounted to 26.58 mln tonnes and 1.88 mln tonnes respectively.

Brazil has already threshed 4% of the second crop corn area. Safras&Mercado lowered the forecast of the total corn harvest in 2023/24 MY from 126.13 mln tonnes to 123.31 mln tonnes (140 mln tonnes in 2022/23 MY), as the average yield will decrease from 6 to 5.9 (6.3) t/ha.

According to the Buenos Aires Grain Exchange, as of May 23, corn was harvested on 28.2% of the area (29% last year), and dry frosty weather reduces the moisture content of the grain and accelerates the harvest.

Tags: corn, Brazil, prices, USA, Ukraine