The reduction in ethanol production in the U.S. increases pressure on corn prices

According to the weekly report of the EIA for the week to ethanol production dropped more than expected, while inventories grew by 74 thousand barrels to 20.3 million barrels, putting pressure on corn prices, which fall on higher production forecasts.

Analysts had expected after recovery to the level of 900 thousand barrels/day production volume of ethanol will remain stable due to gradual growth of demand for automotive fuel. However, last week the volume of production decreased by 27 thousand barrels/day to 931 thousand barrels/day, which was the biggest April drop, and corresponds to the consumption of maize 2.4 million tons/week. Since the beginning of the season for ethanol production is already used by 117 million tons from projected USDA 123 million tons of corn, and for the last month of the season can be used 9 million tons.

the corn Futures on the Chicago stock exchange yesterday rose to 127.2 $/t followed oil prices, but traders are traded very cautiously in anticipation of the promulgation of the August 12 USDA report and meetings of trade representatives of the USA and Canada, which will be held on August 15.

in Recent weeks, the President trump has repeatedly stated that a trade agreement with China for him is not important, because he thinks China is guilty of proliferation coronavirus in the world and USA in particular.

Beijing has not fulfilled its obligations regarding the purchase of agricultural and energy products, although in recent weeks has stepped up purchases of soybeans and corn. In the case of increasing purchases of maize from the United States, China will reduce its imports from Ukraine, that amid the record production will negatively affect purchase prices in the new season.