Corn commentary: Futures firm as markets get back to work

After Tuesday’s pause, the return of South America to business and the slight weakening of the US dollar rekindled some upward momentum as the front month corn contract reached 1800 London time just above the $3.67/bu level.

That ensured all Agricensus physical corn prices climbed once again, with the the Americas and the Black Sea seeing the strongest gains.

Buying interest remained evident in the Black Sea, with the physical bid-offer range for March loading handys in a panamas port heard at $180-$182/mt.

With the vessel size typically commanding a $2/mt premium to the standard assessed value, the values equated to buying interest at $178/mt.

Agricensus nudged its March value higher by 25 cents, but firm buying interest for April loadings – with a bid heard at an 82 cent premium to the April contract equated to buying interest around $178/mt on a handysize basis.

Overall, that took the FOB Ukraine assessment 25 cents higher to $178.50/mt.

The US Gulf also continued to see physical premiums gaining ground as the US consolidated its position as corn supplier to the world.

"We see stronger demand from Southeast Asia for US corn, because prices in Argentina are not competitive. A lot of demand is flowing from South America to the US," one Singapore-based corn trader told Agricensus, with the bulk of Asia’s feed buying often done after this week’s new year celebrations.

"People are going on breaks, they normally start looking at [feed demand] after the holiday," a second source said.

Premiums for March and April loading in the US Gulf nudged higher to be assessed at 62 cents over March and 54 cents over April, taking the outright price up by a dollar to $169/mt.

US data releases disappointed corn demand however, with EIA data showing a 41,000 barrel a day decline in ethanol production.

Stock levels, which have also been running at high levels, with the main consumption and export hub in the East Coast accounting for over 60% of the stock decline.