Corn: Cash, futures prices keep sliding

Global corn prices continued moving downward on Monday both on physical and futures markets, as weather conditions in the US improved but Brazil's weather remained dry.

Argentina's spot corn contract settled at $306/t fob Necochea/Bahia Blanca, down by $1/t from last Friday's close. Losses were driven exclusively by declining Chicago Board of Trade (CBOT) corn futures contracts, with premiums remaining unchanged from the previous trading session.

CBOT corn futures fell along the curve, with the July contract down by ¢6.2/bu to $7.78/bu at the time of writing. Losses may have resulted from improved weather in the US corn belt. The cold an wet conditions which have been delaying planting this season are forecast to abate this week. This may allow farmers to step up the planting campaign.

The downward movement in CBOT corn futures may have also come from strong technical resistance, as despite improving weather conditions, US corn acreages are expected to reduce on the year, with farmers giving preference to crops that require lesser input costs, such as soybean.

In contrast, Brazil continues to experience dry conditions, which have already decreased expectations for the country's second "safrinha" corn harvest. Conab's current forecast for Brazil's corn production in 2021-22 stands at 115.6mn t, but could be decreased in the future — in comparison, Argus' agricultural analytics's arm Agritel pegs the country's output at 107.3mn t.

In the Black Sea region, Ukrainian corn was heard offered lower on Monday on a dap Chop basis, with offers at $262/t for May-June shipment, compared with $265/t on Friday. Bid levels were heard unchanged at $255/t for June shipment.

On a dap Constanta basis, bids were heard unchanged at $290/t for shipment in the second half of May. And corresponding offers reappeared at $310/t after none were heard on Friday.

On a dap Izov basis, Ukrainian corn was heard offered at $255/t for May-June shipment. Bids were heard at $252/t and $250/t for shipment in May and June, respectively.

On the European side, spot corn contracts were heard offered at €331/t ($350/t) fob CVB. Some trading interest was also heard for new-crop corn, with offers at some €328/t for shipment in the second half of October.

Barley

Argentina's spot feed barley contract closed at $372.50/t fob Necochea/Bahia Blanca, unchanged from the previous trading session. But the best bid-offer spread narrowed to $5/t from $15/t on Friday. Sellers lowered their offers as buyers remained inactive, despite sustained interest from Chinese and Indian buyers throughout the previous week.

Sellers were heard lowering offers for Chinese buyers in particular, as Indian buyers continued to avoid submitting concrete bids, despite maintaining a presence. And no new registrations of barley export sales were heard on Monday, indicating a decline in liquidity.

Elsewhere, French spring barley may be at risk from insufficient rainfall in May, which could affect its yields and production in the next marketing season.