Corn rises amid shelling, but improved Brazil crop forecast limits price gains

The massive missile attack on Ukraine led to an increase in stock market quotations for raw materials. But if the prices of wheat rose by 5-6.5%, then those of corn – only by 2.2-3%, as traders took into account a possible reduction in supplies from Ukraine, which compensates for the projected increase in the harvest in Brazil.

December futures for American corn on the exchange in Chicago yesterday rose by 2.2% to the level of the previous month – 274.9 $/t, in two weeks added 4.9%.

November corn futures on the Paris Euronext rose 3% yesterday to €334.75/t (+3.5% in two weeks) or $335.9/t.

November Black Sea corn futures in Chicago fell another 0.8% to $297.25/t, losing 2.3% in two weeks.

In the October report, Conab experts increased the forecast of corn production in Brazil in 2022/23 FY by 1.4 million tons to 126.9 million tons (112.8 million tons in 2021/22 FY) compared to August estimates due to an increase in the area sown in compared to last year by 3.7% from 21.6 to 22.4 million hectares. The area sown for the first crop of corn decreased by 0.1 million ha to 4.5 million ha, and the gross harvest will increase by 3.7 million tons to 28.7 million tons, while the area sown to saffron will increase by 0.9 million ha to 17.3 million hectares, and the harvest will increase by 10.7 million tons to 96.3 million tons. The domestic consumption of corn will increase by 4.8 to 81.8 million tons, and export – by 8 to 45 million tons.

According to FranceAgriMer, in France on October 3, due to rapid ripening against the background of drought, corn was threshed on 67% of the area compared to 6% last year, and the harvest forecast remains at the level of 10 million tons.

China announced that the quota for duty-free import of corn will remain at the level of last year – 7.2 million tons.

According to estimates from the BAGE exchange, in Argentina, due to a lack of rainfall, only 13% of the planned area has been planted with corn, compared to 24% at this date last year.

A reduction in the harvest in the EU to 55-56 million tons and an increase in imports to 21-22 million tons (16 million tons in 2021/22 MR) will support the demand for Ukrainian corn. Even if the grain corridors are closed, Ukraine will continue to export through its western borders.

Demand prices for corn in the Black Sea ports decreased by $5-10/t to $180-200/t against the background of delays in loading ships.