BEARISH FACTORS
- Expectation of less tight US and global stocks in 2021/22;
- Concern about new cases of Covid-19 and lockdown measures in China;
- Progress of negotiations between Russia and Ukraine.
BULLISH FACTORS
- Covid-19 vaccination progress;
- Expectations of a record grains crop in South America;
- Conflict between Russia and Ukraine;
- Expectation of lower planting in Ukraine.
In the first session of last week in Chicago, the corn market was marked by a clear upward trend, driven by weather adversities in the US corn belt and, once again, by the conflict in Ukraine. May/22 closed Monday with 23 cents/bushel worth of gains from the previous session, finishing the day at 813.25 c/bu. This was the first time since the beginning of September 2012 that corn closed the session above 800 cents/bu.
According to the USDA inspections report, the US shipped 1.14 million tonnes of corn in the week ending April14, which was 335,000 tonnes less than the previous week’s exports and 420,000 below the same period last year. As such, accumulated shipment reached 33.20 million tonnes, 6.3 million below the same period of the previous season.
Also on Monday, the Department released its weekly crop progress report, indicating that planting in the US had reached 4% by April 17. With this, the country’s sowing rate is 3 points behind the same period of 2021 and 2 points below the five-year average.
Intraday (15 min) - May/22 (CBOT)
On Tuesday, after the previous day’s drops and the break of the psychological barrier of 800 cents/bu, the corn market had a typical day of profit taking. With this, May/22 dropped by 9.25 cents/bushel on the day.
On Wednesday, corn futures recovered the previous day’s losses and reached their highest value since August 22, 2012, when the nearby contract closed the session at 830.25 cents/bu. The adverse weather for corn planting advance in the US, logistical problems in Ukraine and concerns about the weather in Brazil (and consequently about safrinha corn) were the main factors supporting quotes in the day.
The Energy Information Administration (EIA) reported that US ethanol production dropped to 947,000 barrels per day in the week ended April 15, a weekly decline of 48,000. Ethanol stocks also dropped, to 24.3 million barrels, down 461,000 compared to the previous week.
On Thursday, the corn market retreated again, with May/22 losing 16.5 cents/bu on the day. The declines during the day were motivated by lower-than-expected US sales performance and, once again, by a movement of funds’ technical sales.
The USDA reported that net sales for the 2021/22 crop totaled 879,200 tonnes in the week ended April 14, which is 453,700 tonnes less than in the previous week, but 491,700 above the same week of 2021. The volume was below the range expected by the market, which went from 950,000 to 1.5 million tonnes. As such, commitments to all destinations rose to 56.7 million compared with 67.2 million tonnes in the same period last year.
On Friday, futures retreated, reflecting more favorable weather models for planting in the US this week. May/22 ended up losing 6.25 cents/bushel from the previous day. With this, the contract in question closed the week practically stable, accumulating a 2.75 cent/bu advance (+0.3%), leading the contract to 793 cents/bu.
SPOT PRICES (USD/60kg-bag)
