Corn set for longest rally since May as war lifts US demand

Corn futures are set for a fifth weekly gain, their longest such run since May, as the war in Ukraine sidelines its supplies and leaves buyers turning elsewhere for grain.

The U.S. reported net corn export sales of 2.2 million tons in the week to March 3, topping analyst expectations, government data showed Thursday. Ukraine is a major corn shipper and its ports have been shuttered since Russia invaded. The country still had about 16 million tons left to export this season—about half the total expected before war erupted—and questions remain over how much of that can ultimately make it to market. 

Dry conditions have also hampered some fields in South America, although agencies in Brazil and Argentina kept their harvest estimates steady this week. Farmers in the Northern Hemisphere will begin planting their next crops soon, and it’s unclear how much Ukraine can sow versus normal.

“Strong export sales and continued concerns with a smaller crop from South America helped to support” prices, The Hightower Report said in a note.

Corn futures rose 0.7% to $7.6075 a bushel in Chicago. That puts prices about 0.8% higher on the week and follows a 15% surge in the one prior. Soybeans also headed for a weekly advance.

Meanwhile, wheat is on track for a loss, after the biggest jump on record a week earlier. While Russia seems to be letting some ships carrying grains exit the Azov Sea, supplies from Ukraine are effectively cut off. Crop trader Bunge Ltd. this week said it is suspending any new export business with Russia.

Even with those disruptions, weekly U.S. wheat export sales came in below the average in a Bloomberg survey. The country’s supply remains uncompetitive versus other origins like France, consultant Agritel said in a note.