Strong demand supported corn prices at a high level

the slowdown in corn production for the United States and Ukraine against the background of rapid growth of prices for wheat and vegetable oil in September supported the prices of corn, despite the seasonal increase in supply.

physical active markets corn becomes more expensive due to the active demand from importers, while US exchanges since the beginning of September, the December futures increased by only 2.2% to 144,88 $/t

This week, the pressure on quotation was amplified by data on the improvement of the condition of crops in the US, where the number of crops in good or excellent condition for the week rose by 1% to 61%, and also due to forecasts of warm weather for the next two weeks that will speed up the harvest. As of 21 September in the United States threshed corn at 8% of the area compared to 6% in 2019 and 10% in average for 5 years at that date.

the Fall in oil prices by 5-6% reduces the margin of ethanol production that would reduce the volume of corn processing.

On the physical markets, corn prices rose to 190-200 $/t FOB amid strong demand from Asian buyers and a limited number of proposals due to the low stocks of old crop in Ukraine and South America. The price of Argentine corn shipments in October rose to 190 $/t FOB Brazilian – up to 195-200 $/t FOB, then U.S. corn futures rose to 185-190 $/t FOB, Ukrainian – 195-200 $/t FOB.

the Market supported the purchase of South Korean processors 202 thousand tons likely Latin American corn for delivery in January-February at a price 228-229 $/t C&F.

In Ukraine, the corn continues to rise after wheat. The forecast of the corn crop remains at the level of 32-34 MMT, and as of September 17, with 3% of the area harvested 668 thousand tons of corn with a yield of 4.8 t/ha.

Purchase price in the port increased to $180/t or 6000-6050 UAH/t, while the processors are delivered to the plant offer 5600-5800 UAH/t. Containment manufacturers sales raises prices for the next delivery, as traders await the defaults previously entered in the 155-160 $/t forward contracts due to reduced harvest because of drought.

Soon the corn market expects an increase of offers of new crop from USA and Ukraine, as well as increased supply from Brazil, which as a result of active shipments of soybeans in June-August postponed the export of maize in August-September.

within the first three weeks of September from Brazilian ports were exported 4.55 million MT of corn, and up to the end of the month it is planned to ship 3 million tonnes, bringing the total export amounted to 7.59 million tons in comparison with of 6.44 million tonnes in September 2019.