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It was a volatile week in corn futures. Futures plunged early in the week on favorable weather conditions and solid corn crop ratings but were up sharply at week’s end as the market ran out of selling and reestablished some risk premium for the possibility of a heat wave in the last half of July. The U.S. 2016 corn crop rating was 75% good/excellent, unchanged from last week, up from 69% last year and the five-year average of 64%.
This year’s rating is the fifth highest of the past 30 years. USDA reported U.S. corn sales, for the week ended
6/30/16, of 14.6 million bushels were the lowest weekly sales since the last week of January. Nevertheless, 2016/17 total export commitments are 216 million bushels vs 127 million at this time last year.
Brazil 2015-16 corn production is estimated at 69.1 MMT vs. 76.2 MMT in June, Brazilian crop agency Conab says. Conab’s estimate was well below the average estimate of five analysts surveyed by Bloomberg of 75.9 MMT, and down 18% from 2014-2015 production of 84.7 MMT. Global corn production in 2016-17 season is estimated at 1,018 MMT, down from June forecast of 1,027 MMT, according to UN FAO-AMIS due to concerns that hot, dry weather reduced Brazil’s corn crop. Ending stocks are forecast to drop for the second straight year, seen at 207 MMT vs. June estimate of 214 MMT. Brazilian farmers will increase acreage dedicated to corn in the September planting season for the first time in almost a decade, but soybeans will account for the bulk of Brazil’s grain expansion, an informal poll of nine analysts, traders and agronomists by Reuters showed. These experts estimated that Brazil’s soybean area will grow by 3.5 percent to 34.3 million hectares, according to the results of the survey. In the winter planting season in early 2017, acreage for corn will increase by 771,000 hectares, or 7.5 percent, to 11.05 million.