Due to small stocks and sowing areas corn prices increased by 7%

2021-07-01 12:58:21
Machine translation
Due to small stocks and sowing areas corn prices increased by 7%

Yesterday, the USDA released two important reports: on grain reserves as of June 1 and the final sowing areas for the 2021 harvest. these indicators were lower than traders expected, to which prices reacted with an increase of 7%.

 

July corn futures rose by 3.7% to 2 285.4/ton, and December – immediately by 7.3% to.231.5/ton, having added 13% in price since Monday.

 

Quotes were supported by data from the US Energy Agency EIA on an increase in ethanol production for the week by 1% to 1.06 million barrels/day, which corresponds to the consumption of 2.72 million tons of corn per week.

 

According to the USDA quarterly report, as of June 1, grain reserves in the United States decreased by 18% compared to the same period last year to 104.4 million tons, which is 1% lower than traders ' expectations. In particular, farmers ' corn stocks decreased by 39% to 44.2 million tons.

 

Corn acreage in the United States totaled 92.7 million acres, or 37.54 million hectares, which is 1.6 million acres higher than the March forecast and 1.87 million acres, or 2%, last year. However, analysts estimated them at an average of 93.4 million acres, and the most optimistic – at 95 million acres, given the high prices and demand for corn. A decrease in corn sowing area compared to forecasts due to dry conditions in the northwestern corn belt of the United States may lead to a decrease in yields.

 

According to USDA experts, the corn yield will be 179.5 bushels/acre, which will provide a harvest of 15.16 billion bushels or 385 million tons. however, the actual harvest may be less, which will increase pressure on the global corn balance and lead to a further reduction in stocks.

 

In the coming days, the heat wave spreading in the Midwest of the United States will continue to warm up prices.

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