Corn commentary: Export sales see Japan return, futures stable

Despite the stronger dollar, corn prices managed to nudge up fractionally at the end of the week, with the front month March futures contract reaching $3.68/bu as of 18:00 London time.

With Asia out of the market and looking ahead to a US holiday on Monday, activity was limited although the USDA revealed a fresh private export sales notice of 116,000 mt destined for Japan.

For the Black Sea, a trade for a handysize vessel loading second half of March was heard done at $179/mt, in line with Agricensus prices that remained unchanged on overnight levels at $178.75/mt for loading 21 to 42 forward.

But South America remained the cradle of concern, with weather the lingering concern given full rein in the overnight BAGE corn crop estimates.

As much as 58% of the young crop is said to be in poor or very poor condition, with Centro-Norte de Santa Fe showing 82% of the early crop in the very poor category, with 60% of the area affected by dryness – more than twice the national average.

Despite the fundamental concerns, physical basis values for Up River FOB March and April softened on what market sources saw as profit taking.

“March is a bit technical… there are still plenty of reasons to be cautious and not to get caught short,” one market source said, “but the way it looks I think there are more reasons not to be long.”

March physical basis was heard at 80 cents over the March contract, with April heard traded at 63 cents over May.

That weaker tone contributed to a softening to the outright Up River price, which fell $1/mt to $175.75/mt, according to Agricensus data.

Elsewhere, Brazil's agriculture consultancy AgRural has put Brazil's centre south first corn crop at 15% harvested, versus 16% this time last year, and the key safrinha crop now 26% seeded, some 5 percentage points below the average.