Corn prices rose sharply despite the" bearish " July balance of supply and demand of the USDA

2021-07-13 12:03:11
Machine translation
Corn prices rose sharply despite the" bearish " July balance of supply and demand of the USDA

On Monday, the U.S. Department of Agriculture (USDA) presented three reports at once : the weekly crop status report, the monthly crop report, and the July supply and demand balance (WASDE), which were generally "bearish" for corn, but the market reaction turned out to be the opposite of logic as always and quotes on the Chicago Stock Exchange rose by 3-6%.

 

Speculative growth in quotations did not keep even the decline in corn exports from the United States for the week by 20%, below the psychological level of 1 million tons to 994 thousand tons (59.1 million tons since the beginning of the season), although to achieve USDA forecasts by the end of the season, it is necessary to ship at least 1.5 million tons per week, as well as improve the condition of crops. The assessment of the state of corn crops in the United States for the week increased by 1% to 65% (good and excellent) against 69% a year ago.

 

 Speculative growth on July futures yesterday was 6.2% to 2 262.5/ton, and December by 3% to.209.8 / ton, and the reason remains only the expectation of hot weather at the end of July during the corn Bloom.

 

 

In the updated corn balance for 2020/21 MG, USDA experts significantly reduced the forecast of the corn harvest in Brazil by 5.5 million tons to 93 million tons, although analysts on average estimate it in the range of 92.2 million tons, (Brazilian agencies Conab - 93.4 million tons and StoneX - 87.93 million tons), but increased the forecast for Argentina by +1.5 million tons to 48.5 million tons, which led to a reduction in world production by 4.38 million tons to 1.120 billion rubles. t. the consumption forecast was also unexpectedly lowered by 3.65 tons to 1.146 billion tons, which led only to a slight decrease in final reserves by 0.74 million tons to 279.86 million tons at the end of 2020/21 mg, against 305.46 million tons last season.

 

 At the same time, the forecast for corn exports for Brazil was reduced by 5 million tons to 28 million tons, and for Argentina it was increased by 1.5 million tons to 35.5 million tons, while for the United States it was left unchanged.

 

 

In the world corn balance for my 2021/22, experts increased the forecast for World corn production by another 4.95 million tons to a record level of 1,194.8 million tons, which is 74.8 million tons higher than the current season, mainly due to an increase in the US harvest forecast by 4.45 million tons to 385.2 million tons against 360.2 million tons this season due to an increase in sowing areas.

 

 

Estimates of global corn consumption also increased by 2.43 million tons to 1.183.47 billion tons, which is 37.22 million tons more than in the 2020/21 season.

 

The forecast for World corn exports was raised by 1.38 million tons to 198.84 million tons, due to an increase in exports from the United States by 1.33 million tons to 63.5 million tons, while the forecast for corn imports was lowered by 1.85 million tons to 187.66 million tons, due to a decrease in the import forecast for the EU by 1 million tons to 15 million tons and Iran by 1 million tons to 7 million tons. the forecast for imports to China remained at the level of this season 26 million tons against the official forecast of the Ministry of Agriculture of China of 20 million tons.

 

The forecast for global final corn stocks in 2021/22 MG was increased by 1.77 million tons to 291.18 million tons, which is 11.32 million tons higher than in the current season.

 

In June, the US weighted average precipitation on corn crops was below normal, but did not represent extreme deviations from the average for 1988-2020, so traders will continue to monitor the weather until the end of July during flowering, which will be a key factor affecting the US corn crop, global balances and prices this season.

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