The CBOT corn futures JUL-23 contract price was 561.4 USc/56 bushel at the time of writing (18th May 2023), down 5.5% w-o-w and 11.8% m-o-m. Plentiful estimated corn supplies for the 2023/24 season are weighing on the corn price. The renewal of the grain corridor deal, together with China’s cancellation of further orders of US corn, fuelled the market sell-down this week. According to market players, corn prices would struggle to rally from the current levels unless there is a threat to the US corn crop.
The US corn planting has progressed this week, with 65% being planted versus 45% last year, supporting traders’ expectations for a big crop.
In the latest CONAB crop report, Brazil's 2022/23 corn estimate was revised upwards by 0.66 million mt to 125.5 million mt; thus, this added further bearishness to the corn market. A Mintec source added, “safrinha corn avoided frost damage that is typical at this time of the year. However, some frost was seen in southern Brazil. Mostly, it has been dry weather, and according to the weather forecasts, it is dry for central and southern Brazil, which could possibly limit some of the safrinha corn yields.”
China continues to cancel US corn purchases, and market players expect more cancellations as current prices are cheaper; Brazilian corn, for instance, is reported to be around $30 cheaper than US corn. According to market sources, China has cancelled 832,000 metric tonnes of US corn in the last three weeks.
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