“Private exporters reported the cancelation of sales of 327Kt of corn for delivery to China during the 2022/2023 marketing year, unwinding the majority of the 420Kt of registered sales made last week,” said the UK analysts.
“Seasonally, we would expect a slowing of export sales, but the rate at which export sales have slowed over the last week, if sustained, would result in full season exports falling far short of the USDA’s full season projection of 46.99Mt.
“With export sales slowing, US stocks have the potential to further ease. Animal feed demand in the US has been depressed this season, with the April WASDE [domestic feed use] forecast at 133.99 Mt, the lowest consumption in four seasons,” they commented.
Yet despite the lackluster demand, global stocks remain tight and speculative investors are maintaining a small bullish, net long position in relation to corn.
The large Brazilian crop continues to pose a long-term downside risk, easing global supply and providing China with an alternative import origin, added the grain market specialists.
“Additionally, new crop planting in the US has also got off to an encouraging start, reaching 8% complete and ahead of average. Combined with a record Brazilian Safriana crop, further pressure on corn markets is expected into Q3.”
Meanwhile, there were further statements over the weekend in relation to the Ukraine grain deal, with former Russian president, Dmitry Medvedev, declaring on Sunday [March 23] that if the G7 moved to ban exports to Russia, Moscow would respond by terminating the Black Sea Grain deal.
The grain corridor deal is up for renewal on May 18, and an extension is far from guaranteed, stressed the analysts.
They also noted that the EU Commission moved last week to quell protest in eastern EU countries over the flood of grains flowing in from Ukraine by promising compensation to growers. Bulgaria, Hungary, Poland, and Slovakia had enacted unilateral bans on the inflows from Ukraine.