Corn commentary

Corn commentary: Futures prices stabilise, corn unmoved

13 Feb 2018

After a robust series of trading sessions, agriculture futures contracts saw some stability and only limited price movement Tuesday, leaving corn broadly unchanged on overnight levels with the front month March contract clinging, in the manner of a survivor, to $3.67/bu.

The lull coincided with holidays in Argentina and Brazil, but the day started with a La Nina update from Australia’s Bureau of Meteorology.

The ENSO wrap-up for February concluded that shifting tropical weather was likely to weaken Pacific trade winds and “hasten the decline of La Nina,” with the phenomenon expected to have passed by the Antipodean summer or early autumn.

Cash premiums in the US Gulf corn markets were unchanged, leaving the outright price unchanged at $168/mt, but movement continued to stir in the Black Sea, where fresh buying interest saw values firm again.

Agricensus assessed the FOB Ukraine corn market for delivery 21 to 42 days forward at $178.25/mt, up $1/mt on the day and in line with physical indications heard in the Black Sea corn market.

Bids and offers for March loading handysize cargoes in panamax ports had been heard earlier in the day at $179/mt versus offers at $180/mt, with that size typically commanding a premium to standard Black Sea handymax cargoes.

However, bids for March loadings of 25,000 mt corn basis Black Sea were heard later in the day at $178/mt, with further interest for China corn cargoes of 50,000 mt also heard in the range of $180 to $182/mt for March loading.

Chinese buying remains a factor supporting values, although sources in the region see the outlet as just normal business – with three panamax-sized vessels said to have been sold to China in the last few days.

ADM, Ameropa and Nibulon were all said to be amongst the sellers – with Ameropa’s first half March cargo traded at $180.50/mt, according to market sources.

“The US has got some issues with GMO, I heard some cargos were rejected in Chinese ports… China is not in a good relationship with the US now, but they have been buying from there as it's much cheaper,” one source said.

However, against a backdrop of potentially higher tensions between the two countries, any breakdown in trade could play to Ukraine’s strengths.

”Who can source corn for now at normal prices? That's only Ukraine,” the source said.

AgriCensus Corn Price Assessments 13 Feb 2018

USD $/mt Spot+/- M1+/- M2+/-
Corn
CIF Korea xxxx xxxx xxxx
FOB Ukraine xxxx xxxx xxxx
CPT Ukraine xxxx      
CIF NW Europe xxxx      
FOB Argentina xxxx xxxx xxxx
FOB Brazil xxxx xxxx xxxx
CIF US Gulf Barge xxxx xxxx xxxx
FOB US Gulf xxxx xxxx xxxx
FOB US PNW xxxx xxxx xxxx