Corn prices remain under pressure from active planting in the United States and the beginning of the second harvest in Brazil, but they are supported by forecasts of severe heat in the United States in the next 7-10 days.
According to the Agency Conab, as of May 20 in Brazil, the first crop of corn was harvested in 77% of the area (+5% per week, but 84% last year), but already collected 0.2% of the second crop of corn Safrinha. The condition of Safrinha crops in most regions remains good, although the growing soil moisture deficit may reduce the yield potential.
Record crop estimate
Conab experts raised the forecast of the Safrinha corn crop to 96.1 mln tonnes, while Agroconsult Brazil estimates it at a record 102.4 mln tonnes, which is 19% higher than last year’s 85.8 mln tonnes.
According to the NASS USDA, in the United States as of May 21, corn was planted 81% of the planned area (69% last year and 75% on average for 5 years). Farmers will complete the sowing in the optimal time, which will increase the yield potential, but the heat forecast for the next two weeks in most parts of the corn belt of the United States may change the situation.
Corn futures
On the Chicago stock exchange, the July corn futures yesterday rose 1.1% to 227,4 $/t (+4% since the beginning of the week), and December – 1.5% to 203,4 $/t (+3.5%) on forecasts of the approaching heat.
In Ukraine, farmers have accelerated the sowing of corn and as of May 18, sowed 3,266 million hectares (4.3 million hectares last year and 5.47 million hectares in 2021 on this date). However, the increase in temperature to 25-26°C amid the lack of precipitation in the next two weeks may lead to a reduction in planted areas.
Despite the resumption of vessel calls to the ports of Odesa and Chornomorsk, traders have not yet stepped up purchases. Demand prices for corn for delivery to the Danube ports remain at 185 $/t, but the volume of supplies decreased as producers sold their main stocks.
In 2022/23 MY, as of May 18, corn exports totaled 26 mln tonnes (21.8 mln tonnes last year), while USDA forecasted 25.5 mln tonnes. Even with the unstable operation of the grain corridor, it will be possible to ship almost 2 mln tonnes of grain by July 1, which will reduce the ending stocks in the country ahead of the season, when corn production is expected to decrease significantly.