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Analysis Grains & Commodities

Corn quotation continues to rise

19 April 2022 - Jurphaas Lugtenburg

Grain quotes on the CBoT started the week in the plus. The price of maize is particularly striking. Last trading session, the listing even reached its highest level in ten years.

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Corn prices rose 3% last night to $813,25 per bushel. That is €296 per tonne. It is the highest level since 2012. Wheat and soy did not set records, but May contracts rose 2% to $1.120,50 and $1.714,75 per bushel (€381 per tonne and €583 per tonne, respectively). For wheat, the July and September contracts are even higher by $8,25 and $2,75 per bushel. According to analysts, this is a clear signal that the market remains very tense. The Matif was closed on both Good Friday and Easter Monday.

The weekly update of the Crop Progressreport from the United States Department of Agriculture (USDA) had a price-boosting effect. Of the expected maize area, 4% has been sown. That is 2% below the five-year average. Of all soya, 1% is in the ground, compared to 2% in the five-year average. Relatively cold weather and wet conditions in corn and soybean regions are delaying spring work.

Tightness continues
The condition of winter wheat is moderate in the United States, reports the USDA. About 30% of winter wheat is classified as 'good' or 'excellent'. That is 2% less than one week ago. And not since 1996 has such a small percentage been given this classification. Drought is the main cause. About 69% of U.S. winter wheat grows in precipitation-deficient areas.

The explanation for the rising grain prices is often pointed to the war in Ukraine. This is partly correct, but analysts point out that tension in the market has been building up for some time. In South America, growers have been dealing with drought for two seasons due to La Niña. The demand on the world market for soy and corn has actually grown during that period. This is mainly due to additional demand from China. Recent developments such as drought in the United States and the war in Ukraine add fuel to the fire in an already tight grain market.

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