Corn Easing Back Lower to Start Friday

Corn futures are trading slightly lower this morning, following Thursday's gains across most contracts. Weekly export sales data showed 942,276 MT of old crop corn sold, a rise from the prior week but a 20.2% decrease year-over-year, with Mexico and South Korea being key buyers. April Census data revealed a 6.08% increase in corn shipments from March, marking the second-largest April on record, while Brazil's corn exports significantly declined compared to last year.

Analysis

Corn futures are experiencing slight downward pressure early Friday, with losses of 1 to 3 cents, following a mixed session on Thursday where July contracts edged up ¾ cent while other contracts saw gains of 3 to 5 cents. A significant factor influencing market dynamics is the decline in preliminary open interest by 14,425 contracts, predominantly from July contracts which fell by 16,906 contracts, coinciding with the commencement of the Goldman roll. The national average cash corn price rose by a penny to $4.15. Weekly export sales for old crop corn, for the week ending May 29, recovered from the prior week to 942,276 metric tons (MT), yet this figure represents a 20.2% decrease compared to the same week last year; key buyers included Mexico (362,300 MT), South Korea (138,600 MT), and Japan (13,500 MT). New crop sales registered 160,116 MT, with unknown destinations securing 65,000 MT. Contrasting this, April's monthly Census data indicated robust corn shipments of 7.78 million metric tons (MMT), a 6.08% increase from March and a substantial 21.06% rise year-over-year, marking the second-largest April shipment volume on record. However, distillers exports in April totaled 894,197 MT, down 7.83% YoY, and ethanol shipments declined 19.58% YoY to 172.26 million gallons. Internationally, Brazil's corn exports in May were exceptionally low at 38,928 MT, a stark contrast to 413,374 MT in May of the previous year. Meanwhile, Argentina's corn harvest is 43.8% complete, with a production forecast maintained at 49 MMT. The Dec 25 Corn contract, after closing up 4 1/2 cents at $4.48 1/4, was trading down 2 1/4 cents.

Key Decisions for Investors

• Investors should closely monitor upcoming U.S. export sales data for sustained recovery and track South American supply developments, particularly Brazil's export pace, given the divergence between strong April U.S. shipments and weaker recent weekly sales.
• The significant reduction in July contract open interest due to the Goldman roll warrants attention; investors with positions in near-term contracts should assess rollover strategies to manage exposure.
• The year-over-year declines in U.S. distillers exports and ethanol shipments suggest potential weakening in these corn demand segments, which could impact overall price dynamics if the trend persists.