- Global grains stocks remain tight in 2021.
- Nevertheless, China has imported 26.2mmt of corn so far this year, up 236% from 2020.
- Most of this has come from the US.
Forecast
Our 2021/22 price forecast for Chicago corn (Sep/Oct) remains unchanged in a range of 4.5 to 5 USD/bu. The average price since the start of the new crop is running at 5.38 USD/bu.
Market Commentary
Last week was negative for Chicago corn, but positive for the EU. Wheat made small gains in both geographies. Prices should remain supported.
Chicago corn started the week negative on profit taking, despite export inspections going better than expected. China has now imported 26.2m tonnes of corn in 2021, up 236% year-on-year.
The US corn harvest is 91% complete, up 5% from the five-year average. Russian corn is 88% harvested. Ukrainian corn is 80% harvested.
Brazil’s first corn crop is 85% planted, up 3% year-on-year. Its soybean plantings are also running at their second fastest pace on record (78%). Argentinian corn is 29% planted, down 9% from the five-year average.
On the wheat front, healthy tender activity pushed the market higher, and the week closed slightly positive. China supposedly bought three cargos out of France. With this, its wheat imports are 21% higher year-on-year.
Russia’s wheat exports jumped 14% week-on-week, despite the increased export tax, but they’re still down 16% year-on-year. The Russian spring wheat harvest is 97% complete.
US winter wheat plantings are 94% complete, in line with the five-year average. Again, the crop condition was ranked at 46% good-to-excellent.
In another chapter of the fertilizer crisis, Russia said fertilizer exports to Brazil are guaranteed, despite capping overall exports.
Nothing has changed fundamentally with both limited supply and increasing demand leaving global stocks for corn and wheat tight. As we’ve been saying for some time, we think the fertilizer crisis has not yet hit production, but it should be lower. The market should remain supported.
Other Insights That May Be of Interest…
Russia Increases its Wheat Export Tax
Will the Fertilizer Crisis Hit Global Grains Production?
Explainers That May Be of Interest…
