The price of corn fell by 3.4% after China canceled purchases and continued operation of the grain corridor

Corn prices remain under pressure from high planting rates and favorable weather in the US, but another cancellation of contracts by Chinese buyers for the purchase of US corn and the continuation of the grain corridor accelerated the drop in quotes.

Yesterday on the exchange in Chicago, July corn futures fell by 3.6% to $221.1/t, and December - by 1.3% to $196.4/t, below the psychological level of the end of 2021. $5/ bushel.

Yesterday, the US MSF announced the cancellation of China's purchase of 272 thousand tons of old crop corn through the mandatory reporting system, and the total cancellation of export sales this week, according to traders, will reach 500 thousand tons. This indicates China's intentions to refocus on the purchase of cheaper corn in the near future. from Brazil and Ukraine.

Weather in the US Midwest is conducive to seeding and development of corn crops. In Brazil, temperatures are gradually rising in second-crop corn growing regions, but soil moisture reserves are still sufficient for crop development. If the dry and hot weather continues in June, there will be risks of a decrease in the corn harvest.

On May 1-15, Ukraine exported 1 million tons of corn, and in total in the season - 25.8 million tons (21.7 million tons last year) of the 25.5 million tons predicted by the USDA in May, so by the end of the season it can ship another 2- 3 million tons

Corn sowing is much slower than last year. As of May 11, 2.265 million hectares were sown with corn (3.23 million hectares last year), and the temperature rise to 24-25 oC against the background of the lack of precipitation in the next two weeks may lead to a sharp reduction in the area of corn sowing, especially in view of the decrease in prices.

UZA experts estimate corn production in Ukraine in 2023 at 21.1 million tons, and exports at 19 million tons, AgResource analysts at 19 and 12.5 million tons, respectively, while MSG of Ukraine predicts a harvest at the level of 22 million tons, and export - 15 million tons. If 3 million hectares are sown at the optimal time, and the average yield is 6 tons/ha, then the harvest can reach 18 million tons, therefore, with domestic consumption within 8 million tons, 10 million tons will remain free for export .

Demand prices for Ukrainian corn remain at $180-185/t with delivery to Danube ports or $220-250/t with delivery to buyers in the EU.

In 2022/23 MR, EU countries imported 23.57 million tons of corn (14.26 million tons last year), of which 56% was supplied by Ukraine, 34% by Brazil. The EU import forecast for FY 2023/24 has been reduced from 24.5 to 20 million tons due to an increase in domestic production to 64.3 million tons (compared to 53 million tons in FY 2022/23), but some farmers may reduce their acreage sowing corn against the background of low prices and high cost of fertilizers.

Thus, the MSG of France predicts a reduction in the area of corn sown to a 30-year minimum of 1.33 million hectares in 2023/24 due to significant losses from last year's drought and the low profitability of corn cultivation compared to other crops.

August corn futures on Euronext fell 3.4% to €217.25/t, or $237.5/t, on news of the continued operation of the grain corridor, matching the November 2021 level.

However, the final data on sowing and the weather in the main exporting countries at the beginning of June may still significantly affect the quotations.