Corn Weekly Comments May 3

Corn Weekly Comments May 3

Corn started the week by opening the overnight session steady and spent most of the night trading around unchanged. Early selling was tied to spill over pressure from the lower soybeans complex and lower Chicago wheat contract. News that the Japanese yen is at its weakest point against the US dollar in 34 years added pressure. The significance to this is Japan is a huge importer of US corn and with a weak Yen, it translates into small imports. As of April 26, Brazil is reporting corn harvest at 79% complete vs 76% last week and 83% average. Light pressure came from the morning’s export inspections estimate for corn as although corn’s pace was within projections, it was also at a 7-week low. Losses were kept in check by weather forecasts continuing to call for significant rain over the next 7 days, which will slow down planting and could result in some acreage switching to another crop.

In Tuesday’s session corn opened the overnight session lower and extended session losses throughout the overnight session. Early selling was tied to Monday afternoon’s better than expected Crop Progress report, which showed US corn planting progress further along than expected. Reports of better-than-expected rainfall amounts in parts of the driest regions of the Corn Belt added pressure. Corn was able to trim session losses once the day session started with most of the support coming weather concerns. The recent rain events are negative no question, but the weather forecasts calling for on and off showers through the second week of May have made traders concerned about planting progress and the potential for acreage adjustments. Strong export demand for corn also continued to limit pressure as corn shipments have average over 1 MMT for 11 straight weeks. Dr Cordonnier left his corn production estimate unchanged for Brazil at 121 MMT but lowered his Argentina estimate 1 MMT to 49 MMT.

On Wednesday corn opened the overnight session steady but slipped to post small losses by the end of the night session. Corn continues to see a tight trading range as the overnight trading range in corn was a tight 3 cents. Early selling pressure spilled over from the lower wheat and soybean complex as corn continues to be a follower. Light selling was tied to report that Ukraine has expected 4.1 MMT of corn in April vs 2.8 MMT in March and vs 2.3 MMT last year. The market and traders are not quite sure how to take the Biden Administrations guidance on how corn-based ethanol will qualify for subsidies when used a s a feedstuff for SAF. The pathway comes from a series of environmentally friendly farming practices that include no till, use of cover crops after harvest, and efficient fertilizer application. Weather forecasts continue to bring light support as on and off again showers are in the forecast for the Corn Belt over the next 14 days, which will delay planting and could result in the switching of acreage.

Last week’s ethanol production report was neutral corn as it showed production at 987,000 barrels, up 33,000 barrels from the previous week. Stocks were estimated at 25.49 million, a decline of 245,000 barrels from the previous week. Gas demand continues to be more than disappointing as it remains at the bottom of the 5-year average.
In Thursday’s session corn opened the session lower but managed to brush off the early selling pressure and push to end the night session with solid gains. Early selling was tied to spill over pressure from Wednesday’s poor close. But corn found support early in the night and bounced to trade with solid gains. Support was tied to weather forecasts continuing to call for rain for much of the corn Belt for the next 13 to 15 days. The potential delay in field activity has a lot of traders comparing this year to 2019, which saw high prevent acres in ND, SD, and MN. At this point, prevent plant acreage is not expected to be a concern, but after another week of rainy weather, who knows. Light support was also due to the BAGE lowering their corn production estimate for Argentina 3 MMT to 46.5 MMT due to continued leafhopper damage. Weather forecasts decreasing rain potential for the Black Sea region combined with Russia’s escalation of attacks on Odessa to support corn as well.

There are about two weeks left in the seasonal tendency for corn to rally. Producers should continue to target $4.65 July to advance sales.

Support for July corn is at $4.35 while resistance is at $4.65.

For the week, July corn was at $4.6025 up 10.25 cents. Dec corn was at $4.8275 up 9.25 cents.

For the month, July corn was down 7.75 cents. Dec corn was down 8.25 cents.