The front end of the corn market continues to stay strong with July corn futures appearing ready and willing to take the place of the expiring May corn futures contract (which is currently trading well above $7!). Brazil’s forecast is still dry and yesterday we saw private analysts slash production down into the 100m MT level. This continues to put a premium in old crop values.
This also confirms that the world demand (aka China) will have to source roughly 10m MT of corn from some other country. All eyes will be on the U.S., watching for shifts in old crop demand and how it effects available supply, as well as watching how feed grain crops develop in the EU, Black Sea and NE China. This will keep our corn S&D tight, and if the U.S. harvest is late/delayed for any reason?? Katy bar the door.
Speaking of U.S. crops, yesterday afternoon’s planting progress report showed U.S. corn planting jumping from 17% to 46% complete in one week. This is up 10% from the 5-year average, just a couple percentage points behind last year. Soybeans had a similar path, showing 24% planted, up from 8% last week, 21% last year, and 11% higher than the 5-year average. This is a good sign for next year’s crops, as history will tell you that early planting success is correlated to stronger than trendline yield- maps below.
Corn is 7 to 11 cents higher
Soybeans are 12 to 15 cents higher