Grain Outlook Brazil looking at a record corn crop

The following marketing analysis is for the week ending May 5.

CORN — Early this week, old crop corn tried to stabilize while new crop struggled with favorable planting weather and absent fresh demand. Many world markets were closed on May 1 for a May Day holiday.

Outside market weakness also pressured prices at times. Energy markets fell hard early in the week as did equity markets. The big move came mid-week when a drone attacked the Kremlin! Russia said it came from Ukraine. Ukraine said it wasn’t them. There was reportedly limited damage to the Kremlin. There was some speculation someone within Russia who doesn’t agree with the war in Ukraine could be behind it. Russia said they reserve the right to retaliate.

And in the “you can’t make this stuff up” category, at the 61st Parliamentary Assembly of the Organization of the Black Sea Economic Cooperation in Turkey, a Ukrainian member struck a Russian official in the face after the Russian tore the Ukrainian flag out of his hand. This single event likely doesn’t affect the grain talks, but where does the Black Sea grain corridor agreement actually stand?

Grain movement out of the Black Sea is slowing as shippers slow or halt incoming ships on the uncertainty of whether they will make it out if the agreement is terminated. Usually, three to four vessels per day are inbound, but that has slowed to two vessels per day. It is usually a nine-day period from entering to exiting Ukrainian ports.

At this writing, results from a May 5 meeting with the grain deal participants weren’t known, but ideas were not optimistic the deal will be extended — unless Russia sees signs of their issues being met. One of the major blocks is Russia’s exclusion from the SWIFT banking system which makes it easy for buyers to purchase Russia’s grain and fertilizer.

July corn posted a key reversal higher on May 3 after trading to its lowest since January 2022 in response to the huge wheat rally and dollar sell-off after the drone attack. This broke a streak of nine lower closes out of the previous 10 days. The December contract also traded to its lowest since January 2022