The USDA increased the forecast of corn production more than analysts had expected

Experts USDА in the August balance has significantly increased the forecast of corn production for the United States, resulting in significantly increased estimates of world production and ending stocks of corn in 2020/21 MG.

compared to the July report forecast corn yields in the U.S. increased by 3.3 bushel/acre to in 181.8 bushels/acre or 11.4 t/ha, gross yield – from 381 to 388,08 million tonnes (345,9 million tons in 2019), while analysts had estimated them at the level of 11.3 t/ha and 385 million tons respectively.

the Forecast of domestic consumption of corn in the U.S. increased by 2 million tonnes to 318,8 million tonnes, in particular for the production of ethanol – to 132 million tonnes, whereas in 2019/20 MG consumption of maize made up of 301.2 million tons, of which ethanol is gone 125 million T.

the Forecast of corn exports from the US increased by 1.9 million tonnes to 56.5 million tonnes (45.6 million tonnes in 2019/20 Mr), which is the backdrop of the fall of the world economy raises doubts of the experts. The forecast of ending stocks has increased by 2.75 million tonnes to 70 million tonnes, but perhaps they are great.

Due to an expected increase in corn production in the U.S. by 7 million tons forecast world grain harvest in 2020/21 MG increased from 1,163 to 1.171 billion tons, compared with 1.112 billion tonnes 2019/20 Mr. While for the EU the forecast corn production was reduced 0.5 million tons, Canada – 0.3 mln t and for Ukraine increased by 0.5 million tons to 39.5 million tons, although local analysts on a background of dry weather in recent weeks has reduced its estimates of crop to 35.5-37 million tons.

the Forecast of world consumption of corn in comparison with the previous report, was increased from 1,1601 to 1,1648 billion tons (1,121 billion tonnes in 2019/20 MG), primarily due to the increase in consumption in the United States by 2 million tonnes and in the EU by 2 million tons to 89 million tons (82.7 million tons in 2019/20 MG).

Evaluation of world exports of corn in 2020/21 MG increased by 2.2 million tonnes to 184,66 million tons, and the end of world reserves by 2.4 million tonnes to 317,46 million tons.

Despite the bearish nature of the report and USDA projected seasonal decline in the price of corn at 0, 25 $/t to 3.1 $/bushel or 122 $/t, the corn futures in Chicago rose yesterday by 1.4% to 130,5 $/ton in the news about the hurricane, which covered several States and damaged granaries and maybe the corn.

However, the fundamental factors will continue to put pressure on prices, especially given the slowdown of the economy due to a pandemic Covid-19. The decrease in ethanol production in the U.S. for the week of 13 thousand barrel to 918 thousand barrels/day (equivalent to the consumption of 2.36 million MT of corn for a week) confirms the next decline in demand.