The midweek corn market is experiencing an upward trend, with prices climbing by 1 ¼ to 4 ¼ cents. The May contract has shown a 7c range on the day, ushering in excitement among investors and traders alike.
Strength in Ethanol Production
The latest EIA data revealed a significant uptick in ethanol production, with producers averaging 1.073 million barrels per day in the week ending on 3/29. This output level marks the highest weekly production since the week of 2/23. Meanwhile, ethanol stocks stand at 26.416 million gallons, reflecting a notable 324k barrel increase.
Market Dynamics and International Factors
Reports from China indicate a strategic move by the nation to slow down corn imports, aiming to bolster the domestic market during planting season and prevent any discouragement among local farmers. Additionally, China’s expansion of planting higher yielding GMO varieties by 2024 signals a strong agricultural strategy for the future.
The fluctuations in Dalian Corn Prices over the past two years, coupled with a recent increase of 43 yuan/MT (~15 cents/bu) following informal import restrictions, showcase the delicate balance of global corn trade dynamics.
International Insights from Brazil and Taiwan
The USDA’s Ag Attache released initial 2024/25 corn estimates for Brazil, projecting a rise in initial area by 500k HA to 22 million. Contrarily, Safras and Mercado reported that Brazil’s 2nd crop corn planting had reached 99.6% completion as of 3/28, highlighting a robust agricultural season in the country.
Wire sources indicate Taiwan’s booking of 65k MT of corn, with high likelihood sourced from Argentina, emphasizing the interconnectedness of global corn trade and demand.
Market Prices and Outlook
As of now, May 24 Corn is priced at $4.26 1/2, indicating a slight decrease of 9 cents but currently up 3 cents, instilling confidence in the market’s resilience. Nearby Cash stands at $4.07 7/8, down 8 5/8 cents, while Jul 24 Corn reflects a price of $4.41, down by 8 1/4 cents but currently up 2 3/4 cents.
Dec 24 Corn is positioned at $4.68, showing a decrease of 6 3/4 cents yet currently up 2 1/4 cents, underlining the fluctuating nature of commodity prices and the optimism prevailing in the market.
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
