The projected decline of the oil market will soon drop the price on corn
Experts are more inclined to think that the world's oil demand unlikely to recover to perederina levels amid the spread of the second wave of the pandemic Covid-19 and increased competition for markets among the oil exporters.
released on 14 September 2020 Energy Outlook was again downgraded forecast of oil consumption. According to the report, the peak of consumption has already passed or will pass soon. Of the three possible two scenarios projected a significant reduction (one-third or half) oil demand by 2040 as a result of rapid development of electric vehicles.
increase of oil production in the U.S. and Canada, due to the extraction of cheap shale oil, will make the Gulf countries, OPEC+, in order to increase its presence in world markets to keep oil prices at a low level, in which development of shale, deep-water horizons oil Sands will be economically feasible. Now everyone can see how cheap oil from the Persian Gulf is excluding from the European market of the Russian.
In September, a large Asian importers has sharply reduced purchases of oil, that once again confirms the slowdown in the global economy. According to analysts IHS, Markit, China in September imports is 31.9 million tons of crude oil, which would be the lowest volume of purchases in the current year (excluding April, when it fell to 29.9 million tons) will be 14% to yield oil imports in August and 25% in July.
China completes the program of purchases of oil in strategic reserves, which began in April with the prisoner at the same time OPEC+ agreement to stabilize the market.
So, in September, India has reduced in comparison with August oil imports by 11% to 16.2 million tons, South Korea – from 12.2 to 8.8 million tons, Japan – from 9.5 to 9 million tons (in January-April it was estimated to 11-13 million tonnes), Malaysia and Taiwan – to an annual minimum 3 and 2.4 million tons respectively.
According to the weekly report of the EIA, in the U.S. for the second consecutive week declining production of ethanol, and this week it fell by 2.2 per cent to 906 thousand barrels/day, which corresponds to the use of 2.33 million tons of corn a week, whereas a year ago the figure was 2.83 million tonnes, the Decline in oil prices and consumption of ethanol reduces the margin in its production, especially given the recent increase in corn prices.
a Further fall in oil prices will further reduce the demand for ethanol and corn, in the period of seasonal increase proposals will increase pressure on prices.
December futures on corn in the U.S. this week fell 3% to 143,5 $/t after rapid growth last week to 148 $/t with the August 125 $/t due to the reduced crop forecast for the US and the active export demand from China.
Reduction of consumption of corn manolovo industry in the US 25-30 million t a year does not compensate the increase in exports to China of up to 10-15 million tons amid increased production compared to 2019 with 347 to 375-380 million tons.
