The improved Outlook for production in Brazil lowers corn prices

the Increase in acreage and an active pace of planting corn in the USA and Ukraine were the main factors of pressure on the price of corn of the new harvest. However, they could support to reduce the crop in Brazil caused by a deficit of precipitation.

And this week in Brazil in growing regions of maize second crop will be moderate and sometimes heavy rainfall, which will improve the condition of that part of the crops that they had not suffered irreversible damage.

FAO Experts predict that this year Brazil will harvest a record of 102.3 million tons of corn, which is 20% higher than the average 5-year average. Lower yields of maize early sowing will be offset by the increase in acreage due to high domestic prices and demand from importers.

the export of corn from Brazil in 2020/21 MG though exceed a yearly average of 35 million tons, but less than the record exports of the previous season, due to increased competition from the United States.

In the may report, the experts, the USDA estimated corn production in Brazil this season in 101 million tonnes, while AgRural, the Agency has reduced the crop forecast by 2.3 million tonnes to 97.7 million tonnes compared with last year 100 million tons.

the July corn futures in Chicago remain at 128 $/t and even the increase in oil prices and increasing ethanol production in the United States are unable to support them.

After the collapse at the beginning of the quarantine, nearly double ethanol production in the U.S. is recovered for a fifth consecutive week, and for the latter increased by 5.6% to 765 thousand barrels/day, corresponding to weekly consumption of maize amounts to 2 million tons.

the Introduction of a curfew in certain regions of the United States, where continuing unrest, can reduce vehicle fuel consumption and to stop the increase in ethanol production.

prices of Brazilian corn for delivery in August, remain at 155 $/MT FOB, but the strengthening of the real world reduces its competitiveness compared with the us, which is offered at 150-155 $/t FOB.

In Ukraine of demand prices for June delivery corn do not exceed 178-180 $/t FOB, but individual traders for execution of contracts are willing to pay 173-174 $/t or 5550-5600 UAH/t at the port. The producers are holding back sales in expectation of further price increases.

Rumors about the plans of Chinese buyers to purchase in June a shipment of corn at 185-188 $/MT FOB are not yet confirmed. Hardly anyone will buy Ukrainian corn at a price of 190 $/t FOB, while the Argentine offer at 145-150 $/t FOB. It should be noted that proposals for the supply of maize to the ports is limited, in addition, the ports begin seasonal maintenance work, ready to receive grain of new harvest.