Low oil prices continue to put pressure on the corn market

on Friday in the course of trading, oil prices rose 20%, but later fell back to the opening level of the session. The growth driver was the news about the recovery of China's economy, where increasing demand for oil and other commodities. However, data on the rapid spread of the virus in the United States, where sick more than 30 thousand people, was an additional factor of pressure on the markets.

the May corn futures in Chicago on Friday, the first grew after the price of oil, and then dropped to 134,7 $/t for the uncertainty over demand for corn from manolovo industry. The market has supported the news about the beginning of Chinese buying of agricultural products from the United States in the framework of signed trade agreements. According to the USDA that private exporters sold to China 756 thousand tons of corn for delivery before the end of the current season (which is the largest contract since July 2013), 340 thousand MT of hard winter HRW wheat for delivery in 2020/21 MG and 110 thousand tons of soybeans in the current marketing year.

Last week, China bought 1.2 million tonnes of U.S. corn, of which 500 thousand tons will be reported in export sales for Monday. Such sales volume equivalent to a week's consumption of corn from manolovo industry, and therefore will not be able significantly to support prices.

the Restoration of China purchasing corn from the United States will reduce demand for Ukrainian corn and will increase pressure on its price. Demand from the EU is also declining as the epidemic Covid-19 countries in Europe, and buyers from Egypt and Asia prefer more and more quality cheap South American corn.

In Ukraine, purchasing prices for maize in port, remain at 157-159 $/t or 5000-5100 UAH/tonne, though traders has increased the demand to close contracts for delivery in March-April. Prices on FOB rose to 171-173 $/t FOB (loaded on vessel) for delivery in March-April, however, further restricts the growth of the low prices of Argentine corn – 163-165 $/t FOB and us 165 $/t FOB US Gulf.

Ukraine per week reduced the export of corn by 45% to 526 thousand tons, and from the beginning of the season exported 21 million tons, which is 17% higher than the corresponding figure last year.

Russia is stepping up sales and last week exported 203 thousand tons of corn, and since the beginning of the season – 2.6 million tonnes, which is 38% higher than the corresponding figure of the previous MG.