Speculation in the corn market persists: the weather in Brazil and the United States continues to support the rise of quotations

In the corn market, traders are actively watching the “weather” conditions, as the need for rains for corn crops in Brazil, the USA, Ukraine and the EU remains high, and the forecasts do not promise anything good at the moment.

Ukraine was flooded with rain in May, but in June the amount of precipitation is minimal, and there is a deficit of precipitation in the corn fields in the central and part of the western regions.

Corn procurement prices continue to fall to $160 per tonne delivered to Black Sea ports and around $165-170 per tonne delivered to Danube ports amid minimal buying activity and increased supply as farmers do not expect the corridor to be extended beyond July 18. and the arrival of a new crop will continue to put pressure on grain prices.

According to Conab monitoring data, in Brazil, as of June 10, harvesting of second-season corn (safrinha) was completed on 1.7% of the planned area (+1% for the week), compared to 4.9% on the same date last year. Most crops are in good condition, so corn yields are expected to be fairly high. According to Conab forecasts, the total production of corn in Brazil in 2022/23 MG is increased by 0.2 million tons per month to 125.7 million tons, which remains a rather pessimistic level compared to the USDA’s June forecast of 132 million tons.

Central Brazil is experiencing a period of drought that is reducing crop potential, and no significant rainfall is expected over the next 10 days.

Light rain is forecast for the next 7-10 days in the southern and eastern US Corn Belt, but no precipitation is expected in the heart of the Midwest. Although the temperatures have dropped slightly to 28-30 degrees, the moisture loss in the crops continues.

The EIA reported that ethanol production fell 1.8% to 1.018 million barrels per day in the week ended June 9, while ethanol inventories fell by 722,000 barrels to 22.226 million barrels.

The U.S. Environmental Protection Agency and Growth Energy filed a notice in the District Court for the District of Columbia on June 13, subsequently agreeing to extend the deadline for issuing the EIA’s 2024-2025 RFS Renewable Fuel Standard final rule from June 14 to June 21.

Under the pressure of these factors on the Chicago Stock Exchange, corn prices in July futures fell slightly by 0.8% to 239.3 dollars per ton, but overall for the month they increased by +3%. Prices for December futures also decreased by 0.4% to 216.1, but for the month they increased by +6.6% and under the influence of the weather factor will continue to rise to the level of prices for the old harvest.

Algeria’s state agency for the purchase of grains ONAB, as part of an international tender, concluded a contract for corn at a price of $260 per ton of C&F for delivery in June-August 2023.