A demand driven rally and supply issues with South American/Black Sea origin took corn market higher. Rally was also brought out by the WASDE report, as corn yield was lowered to 10.794 MT/Hac, corn production down at 360.25 MMT. Overall US corn ending stocks are expected at 39.4 MMT, lowest in many years and lower than 2015/16. Production in Argentina and Brazil cut by 2.5 MMT in all. Overall global crop was reduced by 9.6 MMT, which added fuel to fire. Overall world ending stocks were lowered by 5.2 MMT. China export increased by another 1 MMT to 17.5 MMT.
US corn on exchange moved up by $14/MT against last week. As on 15 Jan 2020, US corn for Mar closed at $209.2/MT; May $210.46/MT and Jul $209.43/MT. FOB prices moved up as well, likewise. FOB prices at US Gulf indicated at $254-248/MT and PNW at $272-265/MT for the period Feb-Apr 2021. Brazilian corn was indicated at $277/MT, up $10/MT against last week, and also Black Sea origin corn up $10/MT at $257/MT.
The export limits set by Argentina; Russia putting export tax on Barley and corn at Euro 15 and Euro 25.MT respectively from 15 Mar 2021 also aided the upward market movement. Ukraine too has asked the government to limit exports to 22 MMT, to avoid shortage for animal feed.
Sorghum continues to find a market in China and exports are expected to be 7.36 MMT. Sorghum production in US is increased to 9.475 MMT. Sorghum price on FOB basis (Texas) was up by $16/MT at $332/MT. Australian Barley prices were reported p by $5/MT at $230/MT on FOB basis and Russian Barley up $21/MT at $241/MT.
US DDGS prices remain higher as production remains low. Prices on FOB basis (US Gulf) indicated at $320-318/MT, up $18/MT; prices at PNW on FOB basis indicated up $12/MT at $313-311/MT. Protein for animal feed is expensive and countries continue to import as there is a need. CNF prices to Vietnam were up $20/MT at $354-357/MT. The demand for CGM is up, leading to increased prices, which reached a peak of $770/MT (FOB), added $84/MT to last week’s prices. CGF prices also were up by $45/MT at $275/MT.
Internal freight rates as well and international container freight rates remain high, leading to higher delivered prices.
by Amit Sachdeva, U.S. Grains Council