Corn prices rebound temporarily amid subdued demand

US Corn Futures closed slightly higher during this session as a result of an increase in export sales, with US corn exports increasing nine times in the last two weeks. Experts predict that the global corn supply will shrink this year, compared to last year's stronger corn output.

Brazil presently boasts the country's second-largest corn harvest, with less rainfall in central Brazil raising concerns that the dry season could arrive sooner than planned. Additional rain was earlier forecast in southern Brazil and Argentina, but it is not likely to improve corn productivity.

China reportedly purchased 136,000 metric tons of US corn, its tenth purchase in the last 11 days. Experts predict that the United States will have a competitive advantage in corn exports until the second Brazilian crop is harvested this summer. Brazil's second corn crop is approximately 95% ready for harvest, whereas Argentina's corn crop has been harvested only 6% of the way, highlighting the impact of recent adverse weather conditions in the country on agricultural product cultivation in Argentina.

So far, sluggish corn demand in the United States has previously worried farmers and entrepreneurs for months. By last week, corn demand had surged considerably from the top export destination, China, which had continued to buy and import U.S. corn over the previous week since March 9. Analysts anticipate more Chinese imports in the future, especially if the price of corn has fallen, China may continue to seek opportunities to buy the crop, perhaps pushing China's total purchase of US corn to 18 million tons.

Although the daily purchase of US corn from China has resulted in an increase in corn prices throughout this period, corn's actual demand is quite low. Analysts believe that the trend of corn prices this year differs from that of 2022, when important events such as the drought in South America affecting crops in Brazil and Argentina, the war in Ukraine, and dry weather in the Midwestern United States helped push prices higher, whereas this year, production from South America or Brazil is expected to improve, with less concern from the war.

According to Doane's annual spring survey of planted areas in the United States, farmers used more land for cultivating corn this year, while soybean acreage remained steady. Corn occupied 92.1 million acres of land, an increase of 3.5 million acres from the previous year as a result of the greater corn-to-soybean price ratio and the falling price of various fertilizers. Farmers anticipate that this year's US corn harvests will be increasingly satisfying due to improved soil moisture in other planted areas. The key to US corn production remains the weather, which may be more favorable to soybean growing areas than wheat, durum wheat, and corn cultivation.

Corn exports in the United States reached a new high for the week ended March 16, with total corn exports reported at 3,095,900 tons (121.9 million bushels), a significant rise from the previous week and over the four-week average. China imported 3,000,800 tons, or more than 100 million bushels, while Japan purchased 683,000 tons, bringing total corn exports for the second half of the current marketing year to 1.376 billion bushels, compared to 2.087 billion last year, with sales of 93,000 tons (3.7 million bushels) for 2023/24 deliveries coming primarily from Mexico (80,000 tons), followed by Japan (683,000 tons) (10,000 tons).

Data for Technical Analysis (1H)

Resistance : 650.29, 650.67, 651.29

Support : 649.05, 648.67, 648.05     

1H Outlook

15Min Outlook    

Source: Investing.com                                        

Buy/Long 1 If the support at the price range 648.90 - 649.05 is touched, but the support at 649.05 cannot be broken, the TP may be set around 650.40 and the SL around 648.85, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 650.29 - 650.44, TP may be set around 651.00 and SL around 649.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 650.29 - 650.44 is touched, but the resistance at 650.29 cannot be broken, the TP may be set around 648.90 and the SL around 650.49, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 648.90 - 649.05, TP may be set around 648.35 and SL around 650.34, or up to the risk appetite.       

Pivot Points Mar 30, 2023 01:25AM GMT

Sources: Brownfield Ag News 1, Brownfield Ag News 2, AG Web