Exchange corn prices continue to decline
Yesterday on the stock exchange in Chicago December corn futures fell 2.7 $/t to 146,5 $/t against the background of falling indexes, due to the possible subsequent recession in the United States.
In the United States triggered a classic indicator of recession in the last 50 years consistently foresaw it coming and once it snapped; the yield on short-term bonds (two-year Treasury bonds) exceeded the yield on long securities (ten-year Treasury bonds) at 1.7%.
Experts Credit Suisse have calculated that, on average, a recession occurs within 22 months after the inversion. Given the current situation, recession may occur in June 2021.
the Fall in corn prices increases the margin of ethanol producers. According to the EIA, ethanol production in the US and a week increased by 5 thousand barrels/day up to 1,045 million barrels/day and exceeded consumption, leading to growth stocks.
Also lower prices stimulates purchases of South Korean corn processors, which in early August purchased 500 thousand tons of corn at a price 200,9-203 $/t CFR for delivery in January.
Brazil is increasing its exports of corn due to high prices for grain in the U.S. in June and July. Estimated Oil World during 1-11 August, the country reduced the export of soybeans to 1.16 million tonnes, which is almost twice lower than the same period last year to 2.71 million tonnes of corn during 1-11 August, it was exported 2.94 million tonnes compared to 0.8 million tonnes for the corresponding period in 2018. So at the end of August corn exports may exceed the record exports of July, when it was shipped of 6.32 million tons.
In Ukraine, the price of corn of the new crop are falling behind the world and already for delivery in October amount 151-153 $/t at the port, whereas a week ago they were at the level 160-163 $/t CPT.
Experts USDA increased the forecast of corn production in Ukraine by 2 million tons to a record 36.5 million tons, while local analysts estimate it to a maximum of 34 million tons.
So in the following months, the corn market will be influenced by forecasts of corn production in the United States and Ukraine.
