This week, corn prices ticked slightly higher as markets eyed the acreage report out of Canada, updates on corn shipments from the USDA, and concerns about dryness in South America.
Before we jump into this week’s updates on corn prices, let’s take a look at the weekly performance of contracts that we’re watching in Chicago.
- May 2018: +3.5% or 13¢ to $3.895 USD / bushel
- July 2018: +3.4% or 13¢ to $3.985 USD / bushel
- Dec 2018: +3.0% or 12¢ to $4.145 USD / bushel
Planting Delays Continue
U.S. corn planting is twice as slow as it was last year.
On Monday, the USDA projected that US farmers have planted just 5% of the corn crop. That figure was below analysts’ expectations that the number would be around 7% for the week. The chart below provides a glimpse on the lack of progress, particularly in Illinois, Missouri, and Nebraska.
That 5% figure is also 10 points behind the pace of corn planting last year, and nine percentage points behind the five-year average. Iowa, which was the top corn-producing state in the county last year, has seen its farmers struggle to get seed into the ground.
With that in mind, more mild weather crossed the Midwest this week, and it’s expected that farmers will have made up some ground. Some farmers might be chattering about the threat of yield loss, but it’s important to note that this shouldn’t be a concern due to the calendar. One of the things that farmers have to consider is that it actually just feels like we’re experiencing a huge delay in corn planting.
The last few years have witnessed earlier and earlier planting across Illinois, which is FarmLead’s second home (we have an office in Chicago). The final week of April and the first week of May are really optimal times for farmers to get out in the fields. Looking a week out, we’re going to see a little bit of rain next week, but temperatures in will range into the 70s by midweek in Illinois. Next week will be critical for planting, but we’re not going to panic just yet. We’ll be paying very close attention to the third week of May when 85% of US corn fields are typically planted.
U.S. Corn Exports on the Move
Markets were able to shrug off this week’s mixed export report. The USDA reported net sales Thursday of 697,100 MT. That figure was off 36% from the previous week and missed the four-week average by 33%. The report did see a strong string of purchases from Mexico, which bought a combined 385,200 MT of old crop.
Actual shipments, however, fared better. The agency reported total exports of 1.7 MMT, a figure that represented a 7% jump from the previous week. That figure also topped the four-week average by 11%. The chart below offers a snapshot of U.S. exports as we head toward the new marketing year.
The top export markets were Mexico (335,900 MT), South Korea (273,300 MT), Colombia (254,300 MT), Japan (178,900 MT), and Vietnam (139,100 MT).
Corn Acreage to Jump in Canada
This past Friday on April 27, StatsCan released its farmer-survey based results of 2018 acreage intentions in Canada.
For the corn crop, Canada’ statistical agency said that Canadian farmers will plant 3.76 million acres of corn in Canada in 2018/19, up 5% from the year before and a new record! Not since 1908 has these many acres of Canadian soil been planted with the coarse grain.
Moderate acres expansions of corn acres in the Eastern Canadian provinces such as Ontario and Quebec have also contributed to this trend. Just for our American readers understanding of the corn landscape in Canada, the province of Ontario is the largest corn producer. Its corn production volumes would put it in the top 15 US corn producer states, ranking similar to that of Texas or Michigan.
Russia Bolsters Corn Acreage Too
Canadian farmers are not the only group planning an uptick in crop production.
The USDA attache in Russia projected that farmers there would increase corn output to 16.5 MMT in 2018/19. The figure represents about a 20% bump from last year while planting intentions are expected to increase by 10%.
Chinese Farmers Ditching Corn?
Finally, in China, the area planted into corn is expected to decline in 2018 by roughly 815,000 acres.
The Ministry of Agriculture and Rural Affairs made the announcement, and it could have sweeping ramifications on other markets.
China has been reducing its corn reserves and the decision to plant less corn is intriguing ahead of its E10 biofuel mandate slated for 2020. It appears that domestic farmers are adjusting to the possibility that the country may slap tariffs on U.S. soybeans.
We continue to sit at 80% sold on 2017/18 old crop corn and 40% sold on 2018/19 new crop corn. As we think that there is some additional weather premium in the market due to the US seeding campaign being slowed, we’re still waiting for our next sale.
Have a great week!
– Brennan, Garrett, and Adrian
April 27 – StatsCan Expects 3.76 Million Acres of Corn in Canada in 2018/19
April 26 – Canada’s Ethanol Industry On The Up and Up?
April 24 – What Does China’s Corn Crop Hold in 2018/19?
April 22 – Corn Weekly GrainCents Digest
April 18– Who’s Running The Show for US Free Trade?
April 15– Corn Weekly GrainCents Digest
April 12– Brazil’s Corn Crop is Smaller Than We Thought
April 11– Brazil’s Corn Ethanol to Triple by 2018/19… So What!