Insight Focus

• US corn plantings made a good start.
• Wet weather in the middle of last week helped soil moisture.
• There are rumours China has cancelled corn purchases, but no confirmation.

Forecast

No changes to our Chicago corn forecast for the 23/24 crop (Sep/Aug) to average in a range of 4,15 to 4,4 USD/bu with and upside bias. The average price since Sep 1 is running at 4,57 USD/bu.

Market Commentary

Negative week for corn in Chicago and Euronext on ample supply. Wheat closed positive on drought concerns in the US.

Last week started negative for Chicago corn after the Friday rally of the previous week and following the first report on crop progress showing US corn is 2% planted ahead of the five year average of 1%. Is really nothing at this stage but in any case a good start in an already well supplied market.

By the middle of the week rainy weather, despite positive for soil moisture, is expected to delay field work and prices turned still closing the week negative.

There were rumors in the market that China would have cancelled a large amount of corn purchased in Brazil and in Ukraine, but no confirmation.

In Brazil, the first corn crop is 46,4% harvested vs. 47,6% last year, and safrinha corn (second and bigger crop) planting is virtually finished being 98,7% complete vs. 96,3% last year.

In Argentina, the corn crop is 11,1% harvested and condition is 17% good or excellent or 6 pts lower week on week. BAGE reduced their corn production forecast by a sizable 4,5 mill ton to 52 mill ton. This is vs. 56 mill ton of the latest WASDE.

In Russia, corn planting has just started and is less than 1% complete with projection of a +1,1% growth in area.

In the wheat front, the first report on US wheat condition was published showing 56% in good or excellent condition much higher than 28% last year. This publication last Monday pressed the marker lower by the start of last week, but it then turned around by the end of the week on weather concerns in the US.

French wheat condition was 65% good or excellent or 1 pts lower week on week and vs. 93% last year.

In the weather front, the US received some rains late last week in the Corn Belt potentially delaying field work which is expected to continue: 24% of the corn areas is under drought condition, up 1 pts week on week. 18% of the wheat area was under drought condition also up 1 pts week on week. Brazil is also expected to receive rains in the corn and soybean areas, as well as Argentina. Europe is expected to continue having wet weather but favorable.

We have the April WASDE this week Thursday and we are expecting a downward revision to Brazil corn production as they have it at 124 mill ton much lower than Conab and other local analysts which have it at 113 mill ton. Argentina has also a 2 mill ton difference between the latest WASDE and BAGE. So most likely we will see lower production.

Despite the short term ample supply, the SnD appears to be getting tighter looking forward with lower production in South America -being harvested now- and lower acreage in the US -being planted now. We continue to think we have seen the low of the market for Chicago corn.

Negative week for corn in Chicago and Euronext on ample supply. Wheat closed positive on drought concerns in the US. Despite the short term ample supply, the SnD appears to be getting tighter looking forward with lower production in South America -being harvested now- and lower acreage in the US -being planted now. We continue to think we have seen the low of the market for Chicago corn. No changes to our Chicago corn forecast for the 23/24 (Sep/Aug) crop to average in a range of 4,15 to 4,4 USD/bu with an upside bias. The average price since Sep 1 is running at 4,57 USD/bu.