Corn futures closed last week’s first session with a dramatic fall in Chicago, pressured by below-expected US export data and by the market’s more optimistic expectations for US production. On Tuesday (7), after agents returned to CBOT from the Labor Day Holiday, December/21 lost 13.25 cents/bushel.
In its weekly export inspections report, the USDA pointed out that the US shipped 275,800 tonnes of corn in the week ended September 2, against 583,500 tonnes in the previous week.
Late in the day, the USDA updated its crop progress report. On September 5, 59% of the crop was in good/excellent condition, 1 point below the previous week and 2 points below the same period in 2020. Regarding development, 21% of US corn was shown as mature, compared to 9% in the previous week, but below the same period last year (23%).
Intraday (15 min) - December/21 (CBOT)
Source: CME. Design: StoneX.
Corn Prices - CBOT (cents/bushel)
Source: CME. Design: StoneX.
On Wednesday (8), the market had a fairly quiet session in Chicago, with agents waiting for the USDA S&D report. On the day, December/21 declined by 0.5 cent/bushel.
The USDA, more specifically its Farm Service Agency (FSA) leaked acreage data before the S&D report, which would be disclosed on Friday (10). The Department promptly removed the information, but even so, news agencies were able to access the numbers, which indicated an increase in corn area.
On Thursday (9), the market had a choppy day in Chicago, with December/21 losing over 6 cents/bushel, but closing the session with a drop of 0.25 cent/bushel from the previous day.
The Energy Information Administration (EIA) reported on the day that US ethanol production dropped to 923,000 barrels per day (mbpd) in the week ended September 3, a weekly decline of 18 mpd. Stocks also dropped by around 720,000 barrels, to 20.39 million.
CONAB announced updated figures for the 2020/21 crop. The first corn crop was reduced from 24.9 to 24.7 million tonnes, with the second crop reduced from 60.3 million to 59.5 million and the third crop going from 1.4 to 1.5 million tonnes. This resulted in an adjustment of the total crop number to 85.75 million tonnes, a drop of 900,000 tonnes compared to last month and below StoneX’s latest estimate of 86.6 million tonnes. CONAB also reduced exports by 1.5 million to 22 million tonnes.
Weekly US export sales - 2021/22
Source: USDA. Design: StoneX.
On Friday (10), with US crop S&D data within market expectations, corn rallied in Chicago. December/21 rose 7.5 cents/bushel, closing the week quoted at 517.5 cents/bushel. With this, the contract accumulated a drop of 6.5 cents/bushel in relation to the end of the previous week, or 1.2%.
US 2021/22 production rose to 380.93 million tonnes, with positive reviews of acreage and productivity, with the latter remaining at 176.3 bushels per acre and the former seen at 85.1 million acres. On the demand side, both domestic consumption and exports were adjusted upwards to 313.1 and 62.9 million tonnes, respectively. It is noteworthy that stocks also rose, to 35.8 million tonnes, favored by higher production and higher carryover stocks in the 2020/21 crop.
For the US 2020/21 crop, there was a cut in domestic demand to 309.8 million and in exports to 69.7 million. In relation to Brazil, 2020/21 production fell to 86 million, resulting in a cut of exports, which stood at 22 million tonnes. For Argentina, old crop production was risen to 50 million tonnes and 2021/22 production was seen at 53 million tonnes.
The Department reported that net sales of the 2020/21 season in the last week of the crop year totaled -87,500 tonnes, i.e. net cancellations. On the other hand, new crop sales reached 905,800 tonnes. As such, commitments for the 2021/22 crop to all destinations of US corn totaled 24.3 million tonnes, compared to the 18.8 million tonnes in the same period of 2021.
SPOT PRICES (USD/60kg-bag)
Source: StoneX, Agrolink and IMEA. Design: StoneX.
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