W21: Maize (Corn) Update

In W21 in the maize (corn) landscape, the USDA indicates that in the week ending May 18th, 2022/23 US corn export cancellations surpassed sales by 75.2K MT. The sales volume represents a 78% drop compared to the previous week and a significant decrease compared to the 4-week average. US corn shipments were mainly destined for Mexico (216.1K MT), Japan (185.7K MT), Morocco (19.8K MT), Jamaica (18.1K MT), and Taiwan (10.9K MT), unable to offset the cancellations made by China (331.6K MT), undisclosed destinations (216.7K MT), Honduras (3.6K MT) and Colombia (1.2K MT). The USDA also indicates that as of May 23rd, US corn planting reached 95%, 9 days ahead of 2022 and 12 days ahead of the 5-year average. 65% of that corn was poking through, about 6 days ahead of average. According to WeatherTrends360, the summer of 2023 is expected to be the coolest in 6 years for the US Corn Belt. For the past 3 summers, the US Corn Belt has trended warmer than normal with varying degrees of drought, mainly in the central and western portions of the Corn Belt. Temperatures should not be a huge factor in the Corn Belt 2023 growing season with fewer instances of extended extreme heat of temperatures at or above 100°F (37.78°C). Additionally, nighttime temperatures have a lower risk of being above average, which is better for corn yields. No major issues are expected during the critical pollination phase as heat will be less of a factor than it has been the past couple of years. Precipitation should also trend favorably for the Corn Belt as a whole with this being the wettest Summer in 4 years. Drought conditions should start to ease in the western Corn Belt. The increased moisture will decrease the threat to crop yields, pastures, and livestock. The only caveat is that there is a chance for drought to expand in the eastern Corn Belt.

SECEX reports that, in the first 14 working days of May, Brazilian unground corn (except sweet corn) exports totaled 150K MT, 13.78% of the 1.088MMT shipped throughout May 2022. The daily average of Brazilian corn shipments was 10.71K MT, a decrease of 78.3% compared to 49.48MT achieved in May 2022. In W3 of May, Brazilian corn exports earned USD 57.055M, against USD 375.218M in May 2022. The daily average value of Brazilian corn exports stood at USD 4.075M, down 76.1% compared to USD 17.055M in May 2022. The price per ton obtained increased by 10.3% in the period, from USD 344.70 in May 2022 to USD 380.40 in May 2023. According to StoneX, Brazil will need to export around 50MMT in the 2022/23 season to accommodate the large production expected for the second Brazilian corn crop. Also, StoneX indicates that Brazilian corn shipments should remain slow for the remainder of the second half of May, but pick up pace again at the turn of June to July, when second-crop volumes reach the market. IMEA indicates that the Brazilian second-crop corn harvest began in the state of Mato Grosso, reaching 0.16% of the total sown area, down 1.08% compared to the same period in the last season and 0.09% points behind the 5-year average. As for the rest of the Brazilian corn crops, 89.36% are in the flowering and pollination phase, and less than 11% of the total are in the phase of high water demand. Rally da Safra estimates the Brazilian second corn crop to reach 102.4MMT, an increase of 10% compared to the previous season and up 5.3% in relation to the March estimate of 97.2MMT. The higher-than-expected productivity in some areas of Brazil’s second corn crop is expected to more than compensate for the planting delay and ensure record numbers in 2022/23.

In W20, the Buenos Aires Grain Exchange estimated Argentine corn production in the 2022/23 season at 36MMT, unchanged WoW. However, experts estimate that 109K ha of corn will be abandoned in Argentina due to the drought, approximately 1.5% of the total, depending on the starting acreage. Argentine corn harvesting as of W20 reached 21.2%, down compared to 25.8% in the same week in 2022 and below the 31.7% average but up 1.5% WoW. Of the corn harvested so far in Argentina, the average yield is 4,540kg/ha. Also, Argentine corn in the period was rated 55% poor/very poor, 43% fair, and 2% good/excellent, but the good/excellent percentage was down 2% WoW. The soil moisture for the corn was rated 49% short/very short and 51% favorable/optimum, with the favorable/optimum increasing by 1% WoW. South Africa’s Crop Estimates Committee (CEC) adjusted upwards the country’s 2022/23 maize production estimate to 16.1MMT, up 2% MoM, 5% YoY, and the third-largest harvest on record. The increase is primarily due to larger-than-expected yields, as the area planted is slightly down from the 2021/22 season. The harvest is made up of 8.5MMT of white maize, and 7.6MMT of yellow maize. A crop of 16.1MMT indicates that South Africa will have sufficient supplies to meet domestic maize demands of roughly 11.4MMT and have over 3MMT available for export markets in MY 2023/24. Lastly, in the January-April period, Peruvian chullpi corn exports totaled 842.84K kg, valued at USD 2.018M FOB, up 6.5% in volume and 43.3% in value compared to the same period in 2022. Peruvian shipments were mainly destined for the US at USD 1.423M, Spain at USD 343.91K, Italy at USD 105.82K, Chile at USD 70.83K, and other countries at USD 73.83K.