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

Corn prices have been rising recently on the back of a speculative increase in wheat prices, but they have been slightly reduced by the intensification of sowing in the US and harvesting in Argentina, as well as rainfall in Ukraine.

 

According to NASS, 83% of the planned area was sown with corn in the US on May 26 (70% a week ago, 89% last year, 82% on average over 5 years). Thanks to the warm weather with periodic rains, seedlings were obtained on 58% of the areas, which corresponds to the average 5-year indicator.

 

Yesterday on the exchange in Chicago, July corn futures fell by 0.5% to $182.1/t (+1% for the week, +3% for the month), and December - by 0.6% to $191/ t (+0.7% and 2.7%).

 

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

 

Yesterday's increase by the MARS agency of the corn yield forecast in the EU from 7.57 to 7.59 t/ha (7.34 t/ha last year) somewhat cooled the quotation.

 

UZA experts, as a result of the reduction in the area of corn sowing to 3.809 million hectares and the lack of precipitation in some regions, reduced the forecast of corn production in Ukraine in 2024/25 MR by 0.8 million tons to 25.5 million tons (29.6 million tons last year), and export - up to 20.5 million tons (26 million tons in 2023/24 MR).

 

As of May 24, 3.81 million hectares or 95% of the planned areas were sown with corn in Ukraine. The rains that passed yesterday and will continue for another 2-3 days will replenish moisture reserves and promote the development of crops. Low temperatures and further rainfall will allow farmers to increase the area of sowing.

 

Purchase prices for corn in Ukraine fell by $3-5/t during the week to $178-180/t or UAH 8,100-8,200/t with delivery to Black Sea ports, and producers reduced offers in anticipation of price recovery. Feed wheat prices rose by another $4-5/t to $190-192/t or UAH 8,600-8,800/t thanks to active export demand, which keeps farmers from selling corn.

 

In 2023/24 MR, Ukraine exported 25.82 million tons of corn, in particular for May 1-27 - 2.92 million tons, while last year for the specified periods, exports amounted to 26.58 and 1.88 million tons, respectively.

 

In Brazil, 4% of the second crop corn area has already been threshed. The Safras&Mercado agency lowered the forecast for the total corn harvest in FY 2023/24 from 126.13 to 123.31 million t (140 million t in FY 2022/23), as the average yield will decrease from 6 to 5.9 (6.3) t/ Ha.

 

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