“Corn markets risk coming under pressure as harvest looms, but this is far from a fully bearish market,” said the CRM Agri team in its latest grain market outlook.
Demand for US corn continues to underpin markets, they reported.
“The drought impacted Brazilian crop is likely to drive additional new crop demand to US markets. The war in Ukraine is supporting old crop demand, while China has continued to purchase US corn, and with every additional sale, US stocks decrease.”
Dryness remains a concern for South America with little rain forecast this week for the Brazilian second corn area.
Bullish wheat markets
Wheat markets have been marked by a bullish upward sentiment since the start of May, which has been driven by ongoing drought in the US, the war in Ukraine and deteriorating French wheat conditions, noted the review.
France is forecast to remain dry this week with very little rainfall forecast. French wheat condition scores have been continuing to degrade, with the proportion of wheat rated good and excellent last week falling below average, said the analysts.
Due to the war in Ukraine, the dryness across parts of Europe and the Americas, alongside the protectionist measures being taken by governments to secure supplies, CRM Agri raised its price forecasts significantly last week for CBOT wheat, corn, and soybeans for Q4 2022.
The analysts predict that, with a minimal exportable surplus from Ukraine, European feed grains will remain elevated throughout 2022 and into 2023.
The next US Department of Agriculture (USDA) crop progress report is due today, where attention will be on spring wheat, corn, and soy planting progress and whether the previous week's improvement in progress has again been replicated, said CRM Agri.