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On November 23, foreign media reported that as of the week of November 22, 2024, global corn prices have not changed much compared to a week ago. The escalation of the conflict between Russia-Ukraine conflict is worrying about the interruption of grain export supply, boosting the soaring of wheat and supporting corn; US corn export sales have performed well, and international crude oil futures have rebounded, providing support for corn prices. However, the improved crop yield prospects due to rainfall in South America, the uncertain outlook for US biofuel policies, and the strengthening of the US dollar exchange rate have constrained the rise in corn prices. The market will continue to pay attention to the weather in South America and the pace of corn demand in the United States in the coming week.
On Friday, November 22nd, the Chicago Board of Trade (CBOT) closed March corn at $4.3525 per bushel, unchanged from a week ago; The spot price of No. 2 yellow corn for the December shipping schedule in Meiwan is $5.1050 per bushel, a decrease of 0.4%. Euronext's corn closed at 211.25 euros/ton in March, up 0.5%; The FOB price for Argentine corn on the river is $209, up 0.5%; The corn futures on the Brazilian B3 exchange were reported at 73.41 reals per bag, down 1.7%.
International crude oil futures rose this week, mainly due to supply concerns caused by the escalation of the Russia-Ukraine conflict. The benchmark Brent crude oil futures closed at $75.17 per barrel, up 5.1% from a week ago. The ICE US dollar index closed at 107.507 points, up 0.78% from a week ago.
The sudden escalation of the Russia-Ukraine conflict triggered concerns about supply disruption
At the beginning of this week, the Russia-Ukraine conflict entered 1000 days. The tension between Russia and Ukraine has escalated, with Ukraine using long-range missiles from the United States and the United Kingdom to strike Russia, and Russia using a newly developed ultra-high factor ballistic missile to attack Ukraine on Thursday (initially rumored to be an intercontinental missile). The escalation of the Black Sea conflict has disrupted the global commodity market and added uncertainty to the corn market, as Ukraine is a major corn exporting country.
The position report shows that as of the week ending November 19, 2024, speculative funds held only 114628 net long positions in the corn futures and options market. If tensions in the Black Sea continue to escalate and global corn inventories are expected to decline in 2024/25, it may prompt funds to increase their long positions in corn futures.
The International Grains Council lowers global corn inventories by 10 million tons year-on-year
The International Grains Council raised the global corn production for 2024/25 to 1.225 billion tons on Thursday, an increase of 1 million tons from last month but a decrease of 0.5% from the previous year's 1.231 billion tons. This month, global corn consumption will be increased by 4 million tons to reach 1.235 billion tons; The global corn ending inventory has been reduced to 275 million tons, a decrease of 4 million tons from the previous month and a decrease of 10 million tons or 3.5% from the previous year. The global corn inventory usage ratio is expected to be 19.44%, compared to 20.07% last year.
It is worth mentioning that IGC has lowered its forecast for China's corn imports for 2024/25 to 15 million tons this month, a decrease of 2 million tons from the previous month and a decrease of 38.1% from the previous year's import volume of 21 million tons.
The pace of corn export sales in the United States continues to lead in achieving the goals of the US Department of Agriculture
The US Department of Agriculture's Export Sales Weekly Report shows that as of the week ending November 14th, the net sales volume of corn in the United States was 1.49 million tons, 14% higher than last week, but 40% lower than the four week average and below market expectations. So far this year, the total sales of corn in the United States have reached 31.4 million tons, an increase of 39.3% compared to the same period last year, which is lower than the year-on-year increase of 41.7% a week ago; Among them, the sales volume of corn to Mexico reached 12.9 million tons, a year-on-year increase of 10.2% (last week+10.5%); The sales volume to Japan was 3.88 million tons, a year-on-year increase of 30.7% (last week+42.4%). This reflects a slowdown in sales pace last week. Chinese buyers still have little interest in American corn. So far in 2024/25, the total sales of corn from the United States to China have been only 26000 tons, a year-on-year decrease of 97.4%.
However, the current progress of corn sales in the United States is still far ahead of the pace required to achieve the US Department of Agriculture's export targets. The US Department of Agriculture predicts that the annual export volume will increase by 1.4% year-on-year. At present, the total sales volume in the United States is equivalent to 53% of the US Department of Agriculture's export target, which is higher than the historical average of 45% for the same period. If the current pace of export sales continues, the US Department of Agriculture will need to raise its corn export target in the future.
From the perspective of export quotations, the current price of corn in the United States is attractive. On November 21st, the FOB price for corn in Meiwan was $209 per ton, an increase of $1 from a week ago. The price of Brazilian corn at the Paranagua port is $219, an increase of $4. Argentine corn is priced at $209 in Shanghe, up $2. On November 22nd, the FOB price of Ukrainian corn was $217 per ton, unchanged from last week.
Expected increase of 500000 hectares in corn planting area in Ukraine by 2025
Taras Vysotsky, the First Deputy Minister of Agriculture of Ukraine, stated on Tuesday that due to the bumper soybean harvest this year, prices have fallen while corn prices remain relatively high. Therefore, farmers will reduce soybean planting area by 500000 hectares and increase corn planting area by 500000 hectares by 2025. On November 22nd, the domestic corn price in Ukraine was 8300 hryvnias per ton, up 75% from the beginning of the year. During the same period, the price of Ukrainian soybeans was 17000 hryvnias, a decrease of 4% from the beginning of the year.