07 Jul 2021

Limit up last week. Limit down this week. Corn prices have lost all the gains ($40/t) made last week amid disappointing US stock and acreage reports.

We expected the weather market to quickly take the lead on the report. However, again, we can only be very surprised by the intensity of the price moves. Markets are clearly very nervous as we are now fully entering the critical flowering season for both US corn and soybean.

It is indeed all about US weather. World soybean and corn stocks are confirmed as very low and a decent US crop is very much needed to balance the world S&Ds. The influence of the US situation on other markets is thus huge. This should continue to be so until at least the end of August.

Currently, our markets are trading in the very low end of the recent trading range, following improving US weather conditions. With much needed rains in the forecast, US markets are pricing a higher probability of a decent level of production. Yet the roller coaster is not over and prices could soon rebound upon any forecast change.

In our regions, the very first harvests in South of Ukraine, Romania and France have started with encouraging yield results. This situation, if confirmed when harvest starts moving North during July and August, could also add some pressure upon EU and UK prices.

Our clients who followed ODA strategy are already well covered at higher levels. We advise them, for the time being, to remain patient as all scenarios are still on the table, and the downside potential should remain limited, as long as grain and oilseed stocks remain so low.

Sébastien Mallet