Corn prices recover despite active planting in the US and harvesting in Brazil

Corn prices remain under pressure from active planting in the US and the start of second harvest in Brazil, but are supported by forecasts of severe heat in the US over the next 7-10 days.

According to the Conab agency, as of May 20 in Brazil, corn of the first crop has been harvested on 77% of the area (+5% for the week, but 84% last year), but 0.2% of corn of the second crop of Safrinha has already been harvested. The condition of Safrinha crops in most regions remains good, although increasing soil moisture deficits may reduce yield potential.

Conab experts raised the forecast for the safrinha corn harvest to 96.1 million tons, while the agency Agroconsult Brazil estimates it at a record 102.4 million tons, which will exceed last year's 85.8 million tons by 19%.

According to NASS USDA data, in the USA as of May 21, 81% of the planned area was planted with corn (69% last year and 75% on average for 5 years). Farmers will complete planting at optimal times, which will increase yield potential, but the heat forecast for much of the US Corn Belt over the next two weeks could change that.

On the exchange in Chicago, July corn futures yesterday rose by 1.1% to $227.4/t (+4% since the beginning of the week), and December - by 1.5% to $203.4/t (+ 3.5%) on forecasts of approaching heat.

In Ukraine, farmers accelerated the sowing of corn and on May 18 they sowed 3.266 million hectares (4.3 million hectares last year and 5.47 million hectares in 2021 on this date). However, an increase in temperature to 25-26 ^o C against the background of a lack of precipitation in the next two weeks may lead to a reduction in sowing areas.

Despite the resumption of calls to the ports of Odesa and Chornomorsk, traders have not yet stepped up purchases. Asking prices for corn delivered to Danube ports remain at $185/t, but supplies have eased as producers sold off core stocks.

In 2022/23 MR, as of May 18, the export of corn amounted to 26 million tons (21.8 million tons last year), against the USDA forecast of 25.5 million tons. Even with the unstable operation of the grain corridor, it will be possible to ship almost another 2 million tons of grain by July 1 , which will lower ending stocks in the country ahead of a season in which corn production is expected to drop significantly.