Corn prices rose 5% on pessimistic data from the Pro Farmer US crop tour

After a four-day survey of the state of crops in the United States, Pro Farmer experts released a report on Friday evening in which they forecast a decline in the corn harvest in the United States, while the forecast for soybean production is in line with USDA estimates.

On the report, December corn futures in Chicago rose 5.2% to $269.2/t on Friday and Monday, adding 9.8% for the week and 12% for the month, though still up 3 .8% inferior to the level of three months ago.

In 2021, Pro Farmer estimated US corn production at 15.116 billion bushels and soybeans at 4.436 billion bushels, and according to the final data of the US MSG, it was 15.115 and 4.435 billion bushels, respectively, so traders trust the agency's forecasts.

Pro Farmer estimates U.S. corn production will decline to 349.5 million tons in 2022, 15.2 million tons below the USDA's August forecast of 364.7 million tons, as yields decline to 168.1 bushels/acre or 10.55 t/ha, which would be 4.2% lower than the USDA estimate of 175.4 bushels/acre or 11 t/ha.

Pro Farmer's soybean yield forecast was left at 51.7 bushels/acre or 3.48 t/ha, while USDA's August estimate was 51.9 bushels/acre or 3.49 t/ha. Soybean production is estimated by Pro Farmer at 123.4 million tons, and by the USDA at 123.3 million tons.

The main reason for the decrease in the corn harvest was unfavorable weather conditions in the west of the "corn belt" at the beginning of the season. According to the FSA USDA, 1.27 million hectares remained unsown, while last year there were only 220,000 hectares. Due to excessive moisture in some regions and severe drought in others, American farmers were unable to sow the third largest amount of corn in the last seven years.

According to USDA Crop Progress, for the week, the number of corn in good or excellent condition fell 1% to 54% and soybeans to 57%, compared to 60% and 56%, respectively, last year.

Prices are being pressured by the low pace of corn exports from the US, which as of August 25 (a week before the end of the 2021/22 season) shipped only 54.6 million tons, which is 20.8% lower than last year's pace. The final export will not exceed 55-55.5 million tons, although the USDA estimated it at 62.6 million tons, so the initial stocks in FY 2022/23 will grow by 7 million tons.

The increase in the export of cheap corn from Ukraine against the background of increasing supplies of Brazilian corn, which is cheaper than American corn, will continue to reduce demand in the United States.