High planting rates in the US and favorable weather in Brazil are putting pressure on corn prices

On the Chicago Stock Exchange, May corn futures are trading at a low level, while December futures fell to the lowest since 02/22/23 at $215.2/t against the backdrop of high US planting rates. This increases the pressure on quotations on the stock exchange in Paris, which are at the levels that preceded the start of the war in Ukraine.

It is worth noting that May futures are trading at $255/t, and July futures at $239.4/t, as exports of second-crop corn from Brazil are expected to pick up in July, where the weather is currently favoring the development of crops.

According to NASS USDA, in the US as of April 23, 14% of the planned area was planted with corn, compared to 7% last year and 11% on average for 5 years. Dry and warm weather is expected in the next 7-10 days, which will accelerate the sowing of soybeans and wheat. Currently, 9% of the planned areas are sown with soybeans (5% on average over 5 years), and only 5% of the areas are planted with spring wheat (7% on average).

During the week of April 14-20, the export of corn from the USA amounted to 913.8 thousand tons, and in general in the season it reached 22.36 million tons, which is 36% lower than last year’s pace.

In Brazil, favorable weather prevails in most regions where second-crop maize is grown, especially in the state of Mato Grosso, but in the state of Paraná, sowing is completed after the optimal timing, so there is a risk of damage to the crops due to the drought in May. In the next 7-10 days, the amount of precipitation will decrease, and the temperature in Mato Grosso will exceed 30 ^o C, which may indicate the early start of the dry season.

In an April report, USDA experts estimated Brazil’s corn crop at 125 million tons, although local analysts forecast production to increase to 131 million tons. This will largely depend on whether the rains continue into May or not.

Brazil continues to argue with the United States for the title of the world’s largest corn exporter. In the current season, it exported 10 million tons of grain, compared to 3.5 million tons at the same time last year. In order to take first place, it is necessary to ship at least 50 million tons. However, the soybean export season is now starting, so corn supplies may slow down and resume in July. China has already started buying corn for delivery in July.

Tags: USA, corn, Brazil, prices