Corn prices are rising despite the seasonal increase in supply

2020-10-22 12:12:48
Machine translation
Corn prices are rising despite the seasonal increase in supply

the price of corn on the stock exchanges of the USA and Europe continue to grow and pull the prices on the physical markets, not reacting to such pressures as high rates of harvesting and a reduction in ethanol production in the United States, the fall in oil prices and precipitation in South America, contributing to the planting of soybeans and corn.

 

Quotes respond to a deficit on the physical markets due to containment of sales on the back of lower production forecasts in the EU and Ukraine, as well as rising prices for corn in Brazil, where the government lifted import duty to increase corn imports to cover domestic shortages.

 

the December futures on corn in the United States since the beginning of the week rose by 1.9% to 162,3 $/t on the back of high global demand and curb sales to Ukraine for the delay in housekeeping service.

 

In the United States as at 18 Oct corn collected on 60% of the area compared to 28% in 2019 and 43% on average for 5 years. Usually in the period when threshed more than 50% of areas, prices start to drop on the background of the arrivals of the new harvest and fixation yields, but this year they do not react to fundamental factors of increasing global supply and reducing demand as a result of the pandemic.

 

the market under pressure data on the reduction in ethanol production in the U.S. for the week by 2.6% to 913 thousand barrels/day, although the level of reserves also fell by 300 thousand barrels to 19.72 million barrels.

 

the November corn futures on MATIF since the beginning of the week grew by 4.5 €/t to 190,75 €/t, and in the dollar equivalent of 8.3 $/ton to 226,5 $/ton due to strengthening of the Euro 1,187 to $/€.

 

the Forecasts of corn production in the EU is reduced due to the low yields in France and Romania. It supports prices, especially with the decline in harvest in Ukraine, which is the main supplier of maize in the EU.

 

In Ukraine, 2.4 million hectares or 44% of the area harvested 11.1 million tons of corn, with the result that local analysts have lowered forecasts of the harvest to 29-30 million tons.

 

the Purchase price of corn in domestic ports since Monday has grown to 6-10 $/t to 210-215 $/t or 7100-7250 UAH/t on the background caused by rain delays. Promised for the next 7-10 days, dry weather will accelerate harvesting in the Northern and Western regions where the yield is above average, so manufacturers actively willing to sell the corn at a high price.

 

Yesterday, oil prices dropped by 4%, which will increase pressure on prices. In addition, the market awaits weekly export sales of corn from the U.S., which, according to analysts, due to the lack of demand from China would be negligible.

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