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Corn futures likely poised to hold firm

Getty/iStockphoto Corn with hundred dollar bill
The recent selloff was exactly what end users were waiting for.

Corn futures endured a price slide this week as lower outside markets and a decent jump in planting progress initially weighed on prices.

Late last week corn futures prices had tested overhead resistance levels on charts, and so the lack of bullish news early this week allowed for prices to correct lower. However, the correction lower was quickly met by end users who were waiting for a market dip, to secure corn at a lower value.

The increase in planting pace was welcome news as the world needs the United States to grow a decent crop of corn. Still, the market is not breathing a huge sigh of relief quite yet. U.S. corn is now 72% planted, which is still behind the 5-year average pace of 79%.

This was the year where everything had to be perfect, and yet again Mother Nature continues to have tricks up her sleeve.

Also pressuring the market earlier this week was news that China announced it would begin the process of allowing imports of corn from Brazil. There is not a clear-cut time frame as to when the imports will begin, but some feel that it will likely begin mid to late August, when the Safrinha (second crop Brazil corn) will be mostly harvested, and when the U.S. corn harvest has not yet begun.

Keep in mind that China has purchased a hefty amount of U.S. corn for 2022 and 2023. I view this Brazil/China deal as China finding a different source of corn to make up for what they would normally have purchased from Ukraine. China does not want to have to fully “put all their eggs in one basket” and rely solely on the United States.

China’s buying habits

According to USDA, in the 2020/21 crop year, China imported 29.51 million metric tons of corn; approximately half was from the U.S. and half from Ukraine. For the 2021/22 crop year, China corn imports were pegged at 23 mmt with the U.S. accounting for over half. For the 2022/23 crop year, Chinese corn imports are projected at 18 mmt. And again, China has already purchased U.S. corn for the 2022/23 crop year.

With the Ukraine situation still tense, to me it seems logical that China is opening additional trade doors to secure food for their people. It also says that China is well aware that the Ukraine situation will not be resolved quickly, with lower production and potential issues of receiving grain due to the logistical nightmare Russia has created.

It also says to me that China is well aware of the slow planting pace in the United States, with odds of a record crop likely out of reach. China is aware of overall lower global corn production for the 2022/23 crop year and is doing what it needs to do to feed its people.

China is expected to grow 271 mmt of corn for the 2022/23 crop year, and their domestic use is pegged at 295mmt. The United States is expected to grow 367.3 mmt of corn for 2022/23, down from 383.94mmt for the 2021/22 crop year. The United States grows one third of the world's corn. China produces one quarter of the world’s corn. In fact, most of the world’s corn is grown in the Northern Hemisphere, so weather this summer is a large factor to be considered.

Prices fundamentally might struggle to rally substantially higher unless weather becomes an issue this summer, yet prices fundamentally may not fall out of bed because of the tight supply issue.

For now, it seems that corn futures have found firm footing, and a sideways trade pattern could be unfolding. Cash basis remains firm, reflective of demand, as traders now begin a staredown between chart technicals, seasonals, Mother Nature, and true market fundamentals.

Reach Naomi Blohm at 800-334-9779, on Twitter: @naomiblohm, and at

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The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 

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