Forward prices for corn in Ukraine are growing on data from the United States and Brazil

2021-08-18 12:02:56
Machine translation
Forward prices for corn in Ukraine are growing on data from the United States and Brazil

Another decline in the harvest forecast for Brazil and the deterioration of corn crops in the United States contributes to an increase in forward prices for corn in Ukraine.


The main factor supporting prices remains the rapid speculative increase in prices for Black Sea wheat to the level of 2 270-280/ton with delivery to the port against the background of a possible decrease in the wheat harvest in Russia.


Forward prices for corn for the week increased by another.10/ton to 2 250-260/ton for deliveries to the port in October – November, but further growth is held back by a drop in demand from exporters who have already purchased large volumes under forward contracts.


In Ukraine, as a result of prolonged summer rains, the quality of wheat will significantly deteriorate, so the share of feed grain will grow to 50-60% compared to 20-25% last year. Therefore, the price difference between food and feed wheat has increased to 1 10-15/ton, and an increase in feed grain supplies will increase pressure on corn prices.


According to the USDA weekly report, as of August 15, the number of corn crops in the United States in good or excellent condition decreased by 2% to 62% (69% last year), which surprised analysts who expected an improvement in the condition of crops after the recent precipitation.


Data from crop tours of various analytical agencies for the Midwest of the United States indicate that in the eastern and western regions of the Corn Belt, the yield will vary greatly, but in general it will be higher than last year. CmdtyView experts increased their forecast for the US corn harvest by 7.7 million tons to 389.12 million tons, compared with 374.68 million tons in the USDA's August forecast.


On the Chicago SWOT, December corn futures fell 1% to 2 221.6/ton yesterday under pressure from lower oil prices.


October Black Sea corn futures have fallen by 5 5.25/ton to.265/ton since the beginning of the week, although in general they have risen in price by 5% over the month.


According to the agency AgRural, in Brazil, as of August 16, Corn of the second crop was harvested on 70% of the area, which is 7% less than last year. The harvest forecast was lowered to 82.2 million tons, compared with 102.6 million tons in my 2019/20 and 87 million tons in the USDA's August forecast.


Low demand from Asian buyers increases pressure on prices. This week, the South Korean company Nonghyup Feed Inc (NOFI) purchased 138 thousand tons of corn at a price of 3 322/ton CFR with delivery in November presumably from South America or South Africa.

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