Following oil prices, corn quotes rose by 2.5

A 5-5.5% increase in oil prices at the end of last week, as well as dry weather in the US corn belt, supported corn prices, although physical demand did not increase.

On Friday, July corn futures rose 2.8% to $239.8/t (+3.2% for the week and +2.1% for the month), and December futures rose by 2.8% to $239.8/t on the Chicago Stock Exchange .1% to $213.1/t (+4.8% and 1.1%). New crop prices are likely to rise to old crop prices on forecasts of heat in the US Midwest.

StoneX experts raised the forecast for corn production in Brazil by 2.2 million tons to 133.75 million tons, which is significantly higher than the forecasts of the USDA and local agencies. Expectations of a bumper crop in Brazil are holding back US corn prices. In the state of Mato Grosso, the heat is expected to increase, but thanks to the good condition of the crops and the reserves of soil moisture, the estimates of the harvest have not changed yet.

The export of corn from the USA for the week of May 19-25 amounted to only 187 thousand tons, and in general in the 2022/23 season – already 38 million tons or 84.6% of the USDA forecast.

According to USDA’s Grain Crushings report, U.S. corn processing for ethanol in April fell 4.7% from March to 10.56 million tons, nearly in line with last year’s level. In total, 86.4 million tons of corn were processed into ethanol during the season, which is 84.8% of the USDA forecast.

In Ukraine, as of June 1, 3.89 million hectares were sown with corn (4.5 million hectares in 2022 and 5.4 million hectares in 2021). Therefore, given the lack of precipitation in the central and western regions, the harvest forecast remains at a low level of 20-21 million tons.

Demand prices for corn for delivery to Danube ports remain at $170-175/t, but demand has grown significantly. In Black Sea ports, demand also picked up, but not for long, as the Russians again blocked the movement of ships through the grain corridor.

According to the MSG of Argentina, in the 2022/23 MY as of May 24, the country exported 12.3 million tons of corn (compared to 25.8 million tons on this date in the 2021/22 MY). Forward sales of corn for the 2023/24 harvest are 0.2 million tons, although last year they reached 1.9 million tons. Reductions and delays in harvesting are restraining the supply of corn from Argentina to the world market, which will allow Ukrainian farmers to sell off the remaining corn.

Tags: corn, prices