Lower harvest forecast in Brazil and heat wave in the US keep corn prices at a high level

Forecasts for the corn harvest in Brazil and the United States this week will be the main drivers of the global corn market, as they are expected to be lowered in the June report of the USDA, released on Thursday.

Brazilian analysts lowered their estimates of corn production in Brazil to 90-95 million tons, which is significantly lower than the May forecast of the USDA of 102 million tons. last week, IHS Markit Agribusiness lowered its forecast for the total corn harvest in the country in 2020/21 MG by 5 million tons at once to 88 million tons due to a long drought in the state of Mato Grosso.

Trading on the Chicago SWOT began yesterday with corn futures rising 2% to a near-month high amid lower production forecasts for Brazil and dry weather in the US corn belt. But data on weekly exports somewhat reassured the exchange.

As a result, July corn futures rose 0.8% to 2 270.9/ton, while December corn futures accelerated growth and rose 2.8% to.239/ton.

The volume of corn inspected for exports from the United States for the week decreased by 48% to 1.413 million tons, with traders ' expectations in the range of 1.2-2.1 million tons. in total, 55.4 million tons were inspected during the season, against the USDA forecast of 70.5 million tons.

According to the weekly poiv report, as of June 6, corn sowing in the United States was completed, seedlings were obtained on 90% of the area, compared with 87% last year and 82% on average over 5 years. During the week, the number of crops in good or excellent condition decreased by 4% to 72% (75% last year), which led to a sharp jump in prices for the new crop.

In Ukraine, purchase prices for corn delivered to the port in June remain at a high level of 2 275-280/ton or UAH 8600-8650/ton, but demand from China and the EU is decreasing. Prices for the new crop, following the quotes in Chicago, again rose above 2 250/ton.

Corn imports to the EU for the week decreased by 220 thousand tons, and in general in the season amounted to 13.56 million tons, which is 28% lower than the corresponding indicator last year. At the same time, corn imports from Ukraine almost halved, to 5.97 million tons.