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As of the week ending November 1, 2024, global corn prices fluctuated. Strong demand for corn in the United States, especially with active procurement from Mexico, may prompt the US Department of Agriculture to raise its corn export target.
On Friday, November 1st, the Chicago Board of Trade (CBOT) closed December corn at $4.145 per bushel, down 0.2% from a week ago; The spot price of No. 2 yellow corn for the December shipping schedule in Meiwan is $5.04 per bushel, an increase of 3.1%; Euronext's corn closed at 206.50 euros/ton in March, down 2.6%; The FOB price for Argentine corn on the river is 208 US dollars per ton, a decrease of 1.4%; The corn futures on the Brazilian B3 exchange were reported at 73.11 reals per bag, up 2%.
International crude oil futures fell this week as US production reached historic highs both this week and in August. However, Iran is preparing to launch retaliatory strikes against Israel in the coming days. The global benchmark Brent crude oil closed at $73.10 per ton, down about 3.9% from a week ago. The ICE US dollar index closed at 104.203 points, up 0.07% from a week ago.
Strong corn export sales in the United States, mainly driven by demand from Mexico
The US Department of Agriculture's Export Sales Weekly Report shows that as of the week ending October 24th, net corn sales in the United States were 2.34 million tons, 35% lower than last week but 7% higher than the four week average. So far this year, the sales of corn in the United States have reached 25.82 million tons, a year-on-year increase of 41.3%, mainly due to Mexico's active procurement. The US Department of Agriculture predicts an annual export volume of 59.06 million tons, an increase of 1.4% year-on-year. This means that the US Department of Agriculture is likely to further raise its expectations for US corn exports next Friday.
The daily export sales reports released by the United States in the past week have also been frequent. On Monday, private export reports sold 124000 tons of corn to Japan and 120000 tons to unknown destinations; On Wednesday, it was reported that 273048 tons of corn were sold to an unknown destination; On Friday, it was reported that 781322 tons of corn were sold to Mexico, with 715800 tons to be delivered in 2024/25 and the remaining 65532 tons to be delivered in 2025/26.
From the perspective of export quotations, the current price of corn in the United States is attractive. On October 31st, the FOB price for corn in Meiwan was $209 per ton, a decrease of $6 from a week ago. The price of Brazilian corn at the Paranagua port is $216, a decrease of $3. Argentine corn is priced at $208 in Shanghe, down $6. On November 1st, the FOB price of Ukrainian corn was $200 per ton, a decrease of $1.
California will allow the sale of gasoline blended with higher ethanol to boost corn consumption prospects
An additional support for corn futures this week is that California Governor Gavin Newson wrote a letter to the state Air Resources Board (CARB) requesting permission to use E15 (a blend of 15% ethanol in gasoline) statewide. Currently, California is the only state in the United States that does not allow the sale of E15, and gas stations there can only sell E10. If California also allows the sale of gasoline with higher ethanol blending ratios, it will boost the demand for corn as an ethanol feedstock in the United States.
A monthly report from the US Department of Agriculture on Friday showed that the total consumption of corn in the United States in September 2024 was 490 million catties, a decrease of 8% from August but an increase of 3% year-on-year. The amount of corn used to produce fuel ethanol was 440 million catties, a decrease of 8% month on month and an increase of 3% year-on-year.
September is also the first month of the corn year in the United States. The US Department of Agriculture predicts in its October supply and demand report that the corn consumption in the US ethanol industry for 2024/25 will be 5.45 billion bushels, a decrease of 0.4% year-on-year.
Next week's report may indicate that rainfall has slowed down the pace of corn harvest in the United States
The US Department of Agriculture's Crop Progress Weekly report shows that the progress of corn harvest in the United States continues to exceed historical averages. As of October 27th, the corn harvest is 81% complete, up from 65% a week ago and 68% in the same period last year. The five-year average progress is 64%, and the market expectation is 80%. The US Department of Agriculture predicts that this year's corn production in the United States will reach 15.2 billion catties, second only to the historical record of 15.342 billion catties set in 2023/24.
The next three days' rainfall cloud map released by the National Oceanic and Atmospheric Administration (NOAA) shows that from November 3rd to November 6th, most parts of the United States will experience widespread rainfall, with western regions receiving rainfall ranging from 1.00 inches to 3 inches, and some areas receiving up to 5 inches, which may slow down the final harvest of corn.
The threat of cicadas has decreased, and the yield prospects of corn planting area in Argentina may improve
According to the Buenos Aires Grain Exchange (BAGE), as of October 30th, the progress of corn planting in Argentina for 2024/25 has reached 34.5%, higher than 28.9% a week ago and an increase of 11.1% compared to the same period last year. 86% of corn is rated as average to excellent, up from 81% a week ago and significantly higher than 62% in the same period last year.
EU corn production will decrease by 12.5% compared to the five-year average; Romania's production drops to 12 year low
The European Commission lowered the EU corn production for 2024/25 to 58 million tons in its monthly report at the end of October, a decrease of 5.4% from the previous year and a decrease of 12.5% from the five-year average. Romania's corn production is estimated to have dropped to 6.8 million tons, the lowest level in 12 years.
The EU crop monitoring agency MARS also lowered its corn yield expectations on Monday, mainly due to the deteriorating summer crop prospects in Bulgaria, Romania, Hungary, Croatia, and Italy. MARS has lowered its forecast for this year's EU corn yield by nearly 3%, from the revised 6.85 tons per hectare last month to 6.66 tons per hectare, which is about 9 percentage points lower than the five-year average yield of 7.35 tons per hectare.