Asian corn plunges $13/mt on day, posts biggest daily drop on record

CFR Asian corn prices fell $12.5/mt in its biggest one-day drop ever to close at $412.5/mt CFR March 15, with market sources citing slump in freight rates amid fears of economic slowdown in China affecting sentiment.

South Korea feed makers booked a total of four cargoes, or 266,000 mt of corn, on March 15 in public tenders and private negotiations.
Major Feed Group, or MFG, bought three corn cargoes for June-July delivery in tender that closed March 15.

Panocean sold 65,000 mt of corn for June 23 delivery at $412.50/mt CFR. Bunge sold two cargoes of 68,000 mt each in size, one for July 3 delivery at $412.50/mt and another for July 14 delivery at $413.90/mt. All the cargoes have worldwide options, markets sources said.

FLC took a 65,000-mt cargo from CHS late-March 15 at a combination of flat and basis price of $412.90/mt CFR Inhon and Kunsan and 312 cents/bushel over May (K) futures, for June 15 arrival, a South Korea-based source said.

Trading sentiment in the Asian corn market turned sour following coronavirus-led lockdowns in China.

China, the world’s largest importer of oil, sent nearly 30 million people into lockdown across the country in an effort to contain its worst coronavirus crisis since early 2020, spurred by the highly-transmissible omicron variant.

The government locked down Shenzhen city and Jilin province, while China’s largest city, Shanghai, is under a slew of pandemic-related restrictions as the country pursues its “zero-COVID policy,” local media reported.

“Nothing changed fundamentally. The only one is China [has] massive lockdown of her mega cities, Shenzhen, Jilin and now Shanghai …perceived lower demand for all things, crude, feeds, etc,” one Singapore-based trader said.

The plunge in corn price was also led by falling freight values as Panamax ships on the US PNW-to-South Korea route for May shipment was priced at $43/mt versus $50/mt in the last week, a source said.
Meanwhile, hopes for Ukraine-Russia negotiations could lead to a potential ceasefire have helped pull back crude prices last week, another source said.

S&P Global Platts

Tags: lockdown, markets, Asian, China, corn, South Korea, prices