The price for CBOT corn futures Dec-22 contract was at 690 cents/56 bushel at the time of writing (22nd September), up 1% week-on-week (w-o-w). Corn prices continue to be supported by the reduced USDA 2022/23 global corn production estimate.
The US corn crop condition was again downgraded in the latest USDA crop conditions report (released 19th September) at 52% good-to-excellent condition, down 2% w-o-w and 12% year-on-year (y-o-y). According to the USDA September report, the US 2022/23 corn production estimate was reduced by 7.7% y-o-y to 354.1 million metric tonnes. One Mintec source reported, “Corn harvest is starting to advance across the US, but yields are highly variable”.
In addition, corn prices are being supported by increasing concerns over the South American planting season, especially in Argentina, which has had no rain in the last four months. According to Mintec sources, “Argentina has had the driest weather in 30 years”. South American corn crop planting is starting soon, and the weather at the end of this year and early 2023 will be crucial in determining yields. A better South American corn crop production could alter the supply and demand balance sheets from a bullish to a more bearish outlook.
Also, the EU corn forecast has been reduced by 17.2% y-o-y to 58.8 million metric tonnes, the lowest level since the 2015/16 season. Harvesting began exceptionally early this year (mid-August in some places), and yields are very low due to this summer’s extremely hot, dry weather. According to Mintec sources, “Rains returned to Europe in mid-August, but this was too late to improve the yield potential”.