Corn commentary: Futures rise as Wasde tees up stock cut hopes

Pre-Wasde jostling brought support to the corn complex on Wednesday, as traders anticipate the only significant movement in the Friday report coming to corn ending stocks estimates.

Expectations are converging around a 100 million bushel (2.5 million mt) cut to 2020/21 stock levels, amid strong export demand.

That was enough to add close to $0.06/bu to the May contract, which rose to $5.60/bu, while July added almost $0.05/bu to $5.45/bu.

That was supported by better-than-expected ethanol production data, which bucked analysts' expectations to post an increase to overall production and a decrease to inventory levels.

Over the week, some 2.5 million mt of corn is expected to have gone into the grind, after production ramped up to 975,000 b/d - a 15-week high.

Out in Asia, starting with the Dalian market, corn futures were up CNY41/mt at CNY2,644/mt ($404.13/mt).

South Korea's market reported a brief flurry of interest after news broke of a relaxation in import duties, but the change is likely to target non-GMO food grade imports.

Meanwhile, in Vietnam, offers for May loading cargoes delivered into the country's southern ports were heard at $300.60/mt while July was heard offered at $283.10/mt.

In the Black Sea, the Ukrainian corn market remained calm on Wednesday with offers holding at the same levels as overnight.

Some spot demand was again reported from Egypt, with bids heard at around $276/mt CFR against offers at around $280/mt.

"It is not very competitive, but sometimes it is suitable for spot demand or for fast arrival," a broker said of the potential for Ukraine as a supply point into Egypt.

Offers for May loading on FOB basis were heard at $258-$262/mt in Mykolayiv and around $264-$265/mt in deep sea ports.

On the domestic market, offers were starting at $252/mt CPT versus buyers at below $250/mt.

Romanian corn offers for may loading were heard at €221-€222/mt FOB CVB against buyers at around €217-€218/mt.

In South America, Brazil-based sources reported signs that domestic prices were starting to tempt corn-ethanol producers to sell out of their stocks as they seek to cash in on the high price and tight supply.

Meanwhile, in Argentina, some exporters are expected to face pressure to sell volumes in the days ahead, prompting some sources to expect pressure to come to the Up River basis.

However, other sources pointed to a slow corn harvest and the fact that the attentions of farmers are likely to be split between corn and the start of the soybean harvest.

Meanwhile, Argentina FOB Up River basis premiums firmed through the day amid higher offers heard at 85 cents over September for August loading.

That came alongside a rise in Brazil FOB Santos basis values in recent days, with offers and bids for both July and August loading increasing.

Source: AgriCensus