Corn prices increased by 5% after an unexpected decline in crop forecast for the United States
this season, the markets of grain and oilseeds are sensitive to any new information, so bored traders do not have. So, everyone expected that in the January USDA report will be somewhat revised forecast corn production for the United States, and paying particular attention to the harvest in South America, where there is a shortage of precipitation.
However, unexpectedly large changes in the balance of corn for the United States surprised the market and led to the growth of the March futures on corn by 5% to 203,6 $/t. Usually the data collection is already known in November, and the main indicators reflected in the December balance sheet, and in January there is only a slight adjustment.
compared to the December report the estimated reserves of corn in the United States as of September 1, 2020 decreased by 1.92 million tons, although at the end of September, it had dropped by 6.5 million tons. At the same time the production forecast for the US decreased by 8.24 million tonnes (due to poor yields), the forecast consumption by 3.81 million tonnes (due to the reduction in production of ethanol), the forecast of exports by 2.54 million tonnes (for the slow pace of shipments in the first 4 months of the season), the estimate for ending stocks by 3.81 million tonnes.
a change in the balance for the United States worsened the overall global balance of corn, especially on the background of forecasts of a further decline in yields in South America.
the Forecast for world corn production in 2020/21 MG decreased by 9.67 million tonnes to 1133,89 million tons (1112 million tonnes in 2019/20 Mr), in particular for the United States by 8.24 million tons, Argentina by 1.5 million tons to 47.5 million tons (51 million tons in 2019/20 MG), Brazil – 1 million tonnes to 109 million tonnes (102 million tons), that will be partially offset by increased production in China by 0.67 million tonnes to 260,67 million tons and India-up to 38.5 million tonnes, Although analysts expected a more significant reduction in crop forecasts for Argentina and Brazil.
import Forecast of corn to Egypt have decreased by 0.2 million tons to 10.3 million tons, EU countries – by 1 million tonnes to 18 million tonnes, whereas for China it has increased by 1 million tonnes to 17.5 million tonnes, although MSG China has increased its rating only from 7 to 10 million tons.
Evaluation of world exports of corn in 2020/21 MG decreased by 2.34 million tonnes to 183,61 million tonnes, primarily due to the reduction of U.S. exports.
the Forecast of world consumption of corn in 2020/21 MG decreased by 4.95 million tonnes to 1153,06 million tonnes, mainly from the USA, although for China, the estimated consumption increased 1.5 million tons.
Estimate of world corn ending stocks in 2020/21 MG reduced by 5.1 million tonnes to 283,8 million tonnes (303.4 million tons in 2019/20 MG), in line with analysts ' expectations.
For Ukraine, the balance on the corn have not changed significantly, and the increase in world prices will facilitate the growth of prices for Ukrainian corn and income.