Porto Alegre, June 11th 2024 – The US climate continues to be regular at the beginning of June and while the corn planting is closed. There are a few spots of below-normal rain in May for states like Illinois, Missouri, and the Plains. However, the first report on crops brought excellent conditions for initial development, placing July as the period of greatest attention to pollination and silking. Strong US exports, already requiring USDA to increase its projection for this business year, are the key point for this June’s supply and demand report. In parallel, the wheat situation in the Black Sea, still with strong prices despite last week’s stabilization.
Corn planting in the United States is practically over, with the doubt as to whether local producers closed the projected area of 90 mln acres for this year. The first preliminary data will be released by USDA on the 30th, and a more realistic view of the profile of the planting area will be possible. The area was 91% complete until last week and leaves suspicions that the planting intention forecast could be reached or even fall below expectations. In any case, the weather conditions have been favorable so far, with regular rainfall forecast for June, with only a rise in temperatures, which is normal for the spring.
In the week of the USDA supply and demand report, the market tries to project its expectations regarding the profile of stocks. The market is beginning to believe in a new slight cut in the projection of ending stocks for the current US business year, 23/24. Currently, the stocks are projected at 51.4 mln tons, a good level but that has been reduced with each report due to exports and domestic demand. Exports remain strong, now reaching 51.3 mln tons accumulated up to this first week of June. USDA has been projecting 54.6 mln tons for the business year. The issue, which has been discussed in our newsletters, is the weekly rhythm of one mln tons and the fact that there are still twelve weeks left until the end of the business year. In other words, USDA should raise the export projection for the current business year and reduce ending stocks. We do not believe that the cut will be significant enough to cause sharp highs on the Chicago Board Trade.
For the new crop, USDA does not promote changes in production projections in this June report, under normal planting and crop conditions. Only stock adjustment should occur in this report, based on 23/24 ending stocks. With 75% of crops in good to excellent condition, there is no possibility of cutting the productivity projection in this report. In the new season projections, the next change will only occur in July, based on the acreage report on June 30.
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