Export Inspection Report exceeds market expectations, but deficit in relation to the previous season widens. According to the USDA Export Inspection Report, the US shipped 1,518,200 tonnes in the week ended April 27, 579,400 tonnes more than a week earlier and above the upper range of market expectations, which varied between 700,000 and 1.350 million tonnes. However, the number was below that recorded in the equivalent week of 2022 (1.696 million tonnes) and, as a result, the country increased the deficit of accumulated shipments in relation to the 2021/22 season, to 12.7 million tonnes. On April 20, the gap was 12.55 million tonnes. As of April 27, the US exported 23.9 million tonnes of corn.
US corn planting progress in line with average. On Monday (1), the USDA released its Crop Monitoring Report. The Department reported that corn planting in the US reached 26% through April 30, a weekly advance of 12 percentage points. The number was 1 point below market expectations, but in line with the five-year average for the same period (26%). Today (8), the USDA will release its crop update. Over the last few days, no immediate threat to the pace of planting or the production of the new crop has entered the agents' radar, who expect a pace within the normal range for last week.
Ethanol production rises in the US, but stocks present a significant decline. According to data released by the Energy Information Administration (EIA), US ethanol production rose to 976,000 barrels per day (mbpd) in the week between April 22 and 28, an increase of 9 mbpd in the weekly comparison and 7 mbpd above the five-year average for the same period. Stocks, on the other hand, had a significant decline, to 23.36 million barrels, 1.8 million barrels less than a week earlier.
US records net cancellations, and export sales volume deficit from last season widens. In its Export Sales Report, the USDA reported that US net sales totaled -315,600 tonnes in the week ended April 27, that is, the country had a higher number of cancellations than sales in the period. In the previous week, US export sales had totaled 400,000 tonnes, while in the same period of 2022 this volume reached 782,500 tonnes. As a result, accumulated sales fell to 38.1 million tonnes, expanding its deficit, which was already considerable, to 20.2 million tonnes.
Vendas semanais de exportação - EUA (mil toneladas)
Source: USDA. Design: StoneX.
Concerns about Black Sea grain export agreement are gaining strength again. The Ukrainian president said he does not have high hopes that the Black Sea grain export deal will be extended beyond May 18. In recent weeks, Russia has made several statements that it would only agree to renewing the initiative if there is a significant reduction in sanctions against the country. Russia said it would meet the UN on May 5, but the talks were postponed until this week. Ukraine appears determined to move forward with or without Russia, but whether that can happen remains to be seen. In general, all the uncertainty surrounding the Black Sea conflict has been a factor supporting the grain, and the end of last week was no different. Members of the Black Sea Export Agreement took steps to halt activities. Due to continued complaints by the Russians, a suspension of ships that had been approved for export was implemented. Some additional shipments were stopped voluntarily, due to the risk of being caught if the agreement is not renewed on May 18.
Conditions of the Argentine crop worsen in the weekly comparison. The Buenos Aires exchange reported that 4% of Argentine corn crops were in good/excellent condition on May 4, down 1 point in the weekly comparison and 12 points below the same week of 2022. The corn harvest in the country reached 19.7%, 5.3 points below that seen a year earlier and 10.6 points below the five-year average. The BCBA currently estimates the Argentine crop at 36 million tonnes, 16 million less than in the 2021/22 cycle, but warned that it will again reduce its estimate if yields are below its expectations.
Positive outlook for the Brazilian crop. Last Tuesday (2), StoneX released the update of its grain crop estimate. Regarding the 2022/23 first corn crop, StoneX kept its production estimate unchanged, at 28.6 million tonnes. The 2nd crop received a positive adjustment to 100.8 million tonnes. As a result, total production increased to 131.6 million tonnes, a record for the country. The first crop is 73.9% harvested and, as field work progresses, its number becomes less subject to variations. Winter crop harvesting has not yet started, but as StoneX's estimate shows, the prospects are positive.
USDA's first estimates for the 2023/24 crop will be released this week. On Friday (12), the USDA will release its first estimates for the 2023/24 crop year. The market is expecting an expansion in US corn production, largely due to signs that the El Niño phenomenon is gaining strength, which tends to favor yields in the US.
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