BEARISH FACTORS
- Fears about a possible new wave of coronavirus cases
- Expectation of less tight US and global stocks in 2021/22;
- Progress in US harvest.
BULLISH FACTORS
- Advancing vaccination roll out against Covid-19;
- Resumed activity in some of the terminals affected by Hurricane Ida in the US Gulf.
Corn futures started last week lower, under the pressure from the beginning of the US Midwest harvest and from the logistical problems caused by hurricane Ida. December/21 ended the day with a drop of 4.25 cent/bushel.
The USDA export inspection report indicated that in the week ended September 9, the US exported 138,200 tonnes of corn, a little less than half of the previous week’s shipments. In the same period of 2020, the country had shipped 930,100 tonnes. The lower volume is a reflection of grain flow problems caused by hurricane Ida at Gulf terminals.
On Monday (13), the USDA updated its US crop progress report. On September 12, 58% of the US crop was in good/excellent condition, 1 points below the previous week and 1 point below market expectations. In relation to field work, harvest reached 5% of the country’s area, in line with the five-year average and 1 point above the same week of 2020. The forecasts for the next two weeks indicated a normal crop weather.
Intraday (15 min) - December/21 (CBOT)
Source: CME. Design: StoneX.
Corn Prices - CBOT (cents/bushel)
Source: CME. Design: StoneX.
On Tuesday (14), corn futures were supported by the decline in the percentage of good/excellent US crops, by the increase of wheat quotes and news that terminals affected by hurricane Ida were resuming activities. December/21 ended the day with gains of 7 cents/bushel.
The Chinese Ministry of Agriculture reduced its estimate for feed corn use in the 2020/21 crop by 2 million tonnes to 180 million, and the 2021/22 number by 3 million to 187 million, due to the lack of expansion in the pork sector, motivated by low animal prices.
On Wednesday (15), the corn market rose significantly, pulled up by the strong increase in prices of other commodities. December/21 ended the day with 13.25 cents/bushel worth of gains.
The Energy Information Administration (EIA) reported on that US ethanol production rose again to 937 million barrels per day (mbpd) in the week ended on September 10, a weekly increase of 14 mbpd. On the other hand, stocks declined by 380,000 barrels, to 20 million.
Weekly US export sales - 2021/22
Source: USDA. Design: StoneX.
On Thursday (16), futures had a rather volatile session in Chicago and after December/21 reached two-week highs, the contract returned all of the gains and ended the day with a decline of 4 cents/bushel.
The drop was caused by the release of the US export sales report, which showed low shipment volumes. Net sales of 246,600 tonnes were registered for the 2021/22 crop in the week ended September 9, well below market expectations, which ranged from 500,000 to 1 million tonnes. Sales remained at less than one-sixth the level recorded in the same period last year. As such, commitments to all destinations rose to 24.6 million tonnes, compared with 20.5 million tonnes in the same period last year.
On Friday (17), corn dropped lower in Chicago again, amid expectations of good progress in the US harvesting. The December/21 contract lost 2.25 cents/bushel, closing the week quoted at 527.25 cents/bushel. With this, the contract in question accumulated a rise of 9.75 cents/bushel in relation to the end of the previous week, or 1.9%.
SPOT PRICES (USD/60kg-bag)
Source: StoneX, Agrolink and IMEA. Design: StoneX.
ECONOMIC CALENDAR
BRAZIL
