Corn futures rise again on dry weather forecasts

Corn futures on the Chicago Stock Exchange continue the speculative growth that has been observed since the beginning of the week, despite fundamental factors: a bearish forecast of the USDA, a decrease in export volumes and a decrease in ethanol processing. The main reason for the increase is insufficient precipitation in the northwestern regions of the United States, and hot weather forecasts for the next week.

Over the past 5 days, quite heavy precipitation has passed throughout the US corn belt, but in some states (Minnesota, Northern Iowa and Wisconsin), precipitation is not enough to improve the condition of crops.

Yesterday, July corn futures rose 0.8% to 2 268.9/ton, while December futures jumped 3.3% to.219.7/ton, showing a total of 7.3% growth in three days, but have not yet compensated for a 13% drop (from early July to 9th) due to an increase in sowing areas and the US harvest forecast.

Data from the EIA Association report showed that ethanol production in the United States for the week decreased by 2.5% to 1.04 million tons. barrels per day, which is a consumption of about 2.68 million barrels per day. tons of corn per week.

Corn quotes were supported by Rabobank's forecast that corn exports from Brazil in 2020/21 MG will fall to 21 million tons (12 million tons lower than their previous forecast) due to falling production and rising domestic prices, which is much lower than the USDA's July forecast of 28 million tons of corn.

Quotes for Black Sea corn in Chicago also followed US corn and November corn futures for three days rose by 7.3% to 2 248/ton, although at the end of June they were trading at.260/ton, and in early May they reached. 290/ton.

On Wednesday, the Vietnamese government said it plans to lift 3% duties on wheat imports and reduce duties on corn imports from 5% to 3% to support domestic feed producers, which will also support corn prices.

Mass riots and looting in South Africa due to the imprisonment of former President Jacob Zuma forced road, rail and port logistics to declare force majeure in the country, which could reduce the export supply of corn, which could reach about 17 million tons against 14.5 million tons last season.

Forward prices for Ukrainian corn after falling to the levels of 2 210-215/ton this week again returned to the levels of.220-230/ton with delivery in October-December, but farmers are in no hurry to sign contracts for fear of a repeat of the heat wave in July-August.