Corn commentary

Corn commentary: Rampant soy drags corn along in its wake

12 Feb 2018

A supercharged soy complex fired corn futures at the start of the week, with the front month March CBOT corn up four-and-a-half cents to $3.66/bu, the highest level for the contract seen since October 2017.

Elsewhere, dryness in South America has prompted fears for Argentina and Brazil's corn crop, while physical markets continued to show signs of healthy buying.

Asia's KOCOPIA kicked off the day with twin panamax buy tenders, soaking up 120,000 mt of corn most likely from the US Pacific Northwest after passing on a similar tender last week. 

Market sources saw the first potentially sold by Bunge for April 20 delivery at $204.75/mt CFR with the second going to CJ International for May 5 delivery at $205.50/mt CFR.

That comes after NOFI picked up three panamaxes from ADM and Pan Ocean at levels around $199/mt CFR for similar delivery times. 

Sources continued to report interest for Ukrainian corn from Asia, and China in particular, although market sources indicated that the trading has slowed down in recent days.  

Ukraine data showed corn exports from the country – the fourth biggest exporter globally – have slumped 14.4% on the same period of 2017.

Lower Ukrainian production has seen available volumes drop to 8.3 million mt, leaving sellers struggling to compete with other major producers’ origination prices and freight costs.

But China has thrown Ukraine a lifeline as growing signs of a Sino-US trade dispute over GMO crops has led to American cargoes losing out to Ukrainian volumes, despite the difference in price.

Agricensus FOB Ukraine corn price nudged up slightly, rising 25 cents to $177.25/mt, with CIF Korea prices also rising 50 cents to $199.50/mt. 

Finally, the CFTC also illustrated the clearing headroom above corn prices as the huge net short position that has hung Damocles-like over the market was again slashed in the latest Commitment of Traders report. 

The net short position reached 82,924 lots – down 65% since it hit 226,876 on January 16, fuelled primarily by a 40,000 lot reduction in shorts and a 10,000 lot increase in longs. 

Alongside that, US corn export sales inspections fell week-on-week and year-on-year to 835,131. 

US Gulf differentials ticked up marginally, with March assessed at a 60 cent premium to the March contract, and April assessed at 53 cents over the May contract. 

That joined with the firmer tone on the underlying contract to take the outright assessment $2/mt higher to $168/mt.  

Argentina and Brazil assessments were not published as Carnival arrives in Brazil. 

AgriCensus Corn Price Assessments 12 Feb 2018

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