BEARISH FACTORS
- Fear reagrding a possible new wave of coronavirus;
- Expectations of less tight US and global stocks in 2021/22;
- US harvest progress.
BULLISH FACTORS
- Progress of vaccination against Covid-19;
- Resumed activity of some terminals affected by hurricane Ida in the US Gulf.
Corn futures closed last week’s first session in the negative field in Chicago, with December/21 losing 5.5 cents/bu in the intraday. The contractions observed on Monday (20) were caused, in particular, by the harvest progress in the country, by the fall in crude oil prices and by low export data in the country, which raise doubts about the normalization of the corn flow at the US Gulf terminals.
In its weekly export inspections report, the USDA pointed out that the US shipped 403,100 tonnes of corn in the week ended September 16, above the 159,400 tonnes in the previous week, but below the 768,100 from the same period in 2020. As a result, exports accumulated in the 2021/22 crop (Sept/21 to Aug/22) totaled 602,000 tonnes, compared with 2 million in the same period of the previous season.
Late in the day, the USDA updated its crop progress report. On September 19, 59% of the US crop was in good/excellent condition, 1 point above the previous week and market expectations. In relation to field work, the country’s harvest reached 8%, 1 point below the five-year average and 2 points below market expectations.
December/21 intraday - 15 min (CBOT)
Source: CME. Design: StoneX.
CBOT corn quotes (cents/bushel)
Source: CME. Design: StoneX.
On Tuesday (21), corn futures retreated, once again pressured by the harvest progresses in the US, by crop condition data brought on the previous day (which showed an increase of crops in good/excellent condition) and by economic problems in China, linked to the Evergrande issue. December/21 ended the day losing 4.75 cent/bushel.
On Wednesday (22), the corn market had a rather agitated session in Chicago, with December/21 recovering almost completely from the losses recorded at the beginning of the week by gaining 8.5 cents/bushel. The rallies in the stock and crude oil markets surpassed the pressure exerted by the progressing harvest.
The Energy Information Administration (EIA) reported on the day that US ethanol production dropped to 926,000 barrels per day (mbpd) in the week ended September 17, a weekly decline of 11 mpd. On the other hand, stocks rose by 101,000 barrels, to 20.11 million.
US weekly export sales – 2021/22
Source: USDA. Design: StoneX.
On Thursday (23), futures rose again, pulled up by the rally of other agricultural commodities. December/21 ended the day gaining 3.75 cents/bushel.
The USDA reported that net sales of 373,000 tonnes were registered for the 2021/22 crop in the week ended September 16, at the low end of market expectations, which ranged from 300,000 to 800,000 tonnes. In the same period last year, US net sales totaled 2.1 million tonnes. As such, commitments to all destinations rose to 25 million tonnes, compared with 22.6 million tonnes in the same period last year.
On Friday (24), amid expectations of good field progress, the corn market dropped lower again, with December/21 losing 2.5 cents/bushel and closing the week quoted at 526.75 cents/bushel. With this, the contract had a 0.5 c/bu drop in relation to the end of the previous week (-0.1%).
SPOT PRICES (USD/60kg-bag)
Source: StoneX, Agrolink & IMEA. Design: StoneX.
ECONOMIC CALENDAR
BRAZIL
