US corn futures fall for sixth session on Midwest rainfall

US corn futures dropped for a sixth consecutive trading day on Wednesday June 26 while rain continued to fall in growing areas of the Midwest, with market participants positioning before a USDA acreage report to be released on Friday

Heavy rain has led to the issuance of force majeure by some plants in the northwest corn belt, the states of Iowa, Minnesota and South Dakota. A force majeure clause excuses a party from a contract obligation due to some events beyond their control.

“The corn force majeures are because rail companies are seeing tracks under water, and can’t move the grain,” Marex Capital analyst Charlie Sernatinger said. “The corn is still there.”

By 1pm US Eastern time, the July corn futures contract on the Chicago Mercantile Exchange slipped by 3 cents per bushel (bu) to $4.22 per bu, and September futures fell by 4 cents per bu to $4.28 per bu.

Asian futures rise by 20 yuan per tonne

In Asia, futures on the Dalian Commodity Exchange advanced, with the July contract rising by 20 yuan per tonne to 2,480 yuan per tonne ($341 per tonne), while the much more active September contract rose by 19 yuan per tonne to 2,514 yuan per tonne.

In cash markets, South Korean Major Feedmills Group (MFG) picked up two corn cargoes totaling 134,000 tonnes for arrival around November 5-20 via a tender.

MFG paid $239.81 per tonne CFR South Korea plus a $1.50 per tonne additional port discharge cost for 68,000 tonnes sold by Olam and $239.31 per tonne CFR for a 66,000 tonne cargo from ADM, with a $1.50 per tonne second port discharge cost.

Both amounts can be reduced to 50,000-55,000 tonnes if sourced from South Africa.

Feed Leaders Committee (FLC) picked up one corn cargo via a private deal with ADM at $238.99 per tonne CFR plus $1.25 per tonne for the second port discharge for arrival around November 5, with the corn origin kept optional between South America, the US and South Africa.

In the Black Sea, the corn market remained sluggish with more interest now switching toward barley and wheat.

Selling ideas into Spain were around $215-218 per tonne versus $210-214 per tonne on the buying side for June-July loading.

On an FOB Pivdennyi-Odesa-Chornomorsk (POC) basis, selling ideas were heard around $195 per tonne versus bids just below at $190 per tonne.

Argentina Up River corn offers were mixed

In South America, the front-month Argentina Up River corn offers were mixed. July-loading offers were up by 5 cents per bu to 50 cents per bu over the July CME contract, while August offers were unchanged at 45 cents per bu over the September CME contract.

Brazil’s FOB Santos market was steady. August-loading offers were static at a premium of 62 cents per bu over the September CME contract, while August bids were unchanged at 55 cents over the same underlying contract.

The second corn crop harvest in the Brazilian state of Paraná reached 42% of the 2.4 million hectare sowed area, a gain of 13 percentage points in the week to Monday June 24, state agency Deral’s weekly report showed on Tuesday June 25. The harvest had not yet started at this point in 2023.

Despite allowing the harvest to advance, the dry weather has damaged yields, Deral said.

In the US, CIF Gulf offers for July loading were unchanged at 57 cents per bu over July CME futures. FOB Gulf offers for July loading were steady at 60 cents per bu over the same underlying contract.

US ethanol production fell by 14,000 barrels per day to 1.04 million bpd in the week to Friday June 21, according to data published by the US Energy Information Administration (EIA) on Wednesday.

Meanwhile, ethanol stocks decreased by 194,000 barrels week on week to 23.42 million barrels, according to the EIA.

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