The CBOT corn futures Dec-22 contract price was at 683.6 cents/56 bushel at the time of writing (6th October), up 1% week-on-week (w-o-w). Corn prices continue to be supported by the reduced USDA 2022/23 global corn production estimate. There are tighter corn supplies in the Northern Hemisphere, due to hot and dry weather earlier in the season. The US harvest is in progress however, upcoming rains across the Midwest could slow the progress.
According to the latest USDA crop conditions report (released 2nd October), the US corn crop was at 52% good-to-excellent condition, flat w-o-w and down 12% year-on-year (y-o-y). It is reported that 20% of the harvest was complete, although this is behind the 5-year average of 22% complete. Thus, the US corn harvest progress will remain a watch point for the market. Hurricane season in the US Gulf continues but has not impacted the corn market this year.
There are increasing concerns over the grain corridor’s future. A trader told Mintec, “I’m not sure if the grain corridor deal will continue, sales are not being extended to November. There are already obstacles to commissions, and the pace of vessels is very slow, with a backlog of vessels”. The weather conditions in Ukraine are currently favourable, and corn production is expected at 31.5 million metric tonnes, down 25.2% y-o-y. However, there are still concerns about how much could be planted, given the ongoing war, high input costs and low grain prices. A Mintec source added, “The concern is that I don’t think much corn will be planted next season. Most likely, vegetable oils will take some share of the land”. In South America, crop planting is progressing. In Argentina, corn planting is at 6% compared with the average of 17% for this time of year. Farmers are waiting for the rain over the next few weeks.
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