Higher corn crop forecasts in the US increase pressure on prices

Most experts expected that corn prices would rise to the level of the previous season against the background of rising wheat prices, but favorable weather conditions for the development of crops in the United States, Ukraine and the EU over the past month have increased pressure on quotes.

In the USDA report on acreage announced on September 10, which is usually published in October, soybean and corn sowing areas may be increased to the levels that analysts predicted back in the spring.

Recall that in February, USDA experts estimated the area of corn sowing at 94 million acres (89.7 million acres in 2019), in March they lowered the forecast to 91.1 million acres (despite the average analyst estimate of 93.1 million acres), and in August they raised it again to 92.7 million acres.

Experts of the IHS Markit Agency estimate the area of corn sowing in the United States at 94.4 million acres, the area before harvesting at 86 million acres, the yield at 175.4 bushels/acre, and the gross harvest at 15.08 billion bushels or 383.3 million tons, which is 4.6 million tons higher than the previous forecast. At the same time, the USDA estimates the sowing area at 92.7 million acres, the pre – harvest area at 84.5 million acres, the yield at 174.6 bushels/acre, and the gross harvest at 374.6 million tons, compared to 360.3 million tons in the 2020/21 season.

December corn futures on the Chicago SWOT remained at 2 206.7/ton, as yesterday in the United States was a day off.

November corn futures on the Euronext exchange fell 1.5 €/T yesterday to 215.5 €/t or 2 256/t, losing 1.9% over the week amid improved EU harvest prospects due to heavy rains in August.

In Ukraine, prices for new crop corn delivered to the port remain at the level of 2 240-245/ton or 7300-7400 UAH/ton, while prices for feed wheat reach 2 265/ton, and for food wheat–. 280/ton.recall that at the end of 2020/21 MG, corn prices reached 2 270-275/ton, while wheat prices fell to 2 240-245/ton.

Pressure on the prices of domestic corn is reinforced by rumors about the refusal of some Chinese buyers from Ukrainian corn and barley to pay compensation due to lower-than-expected domestic demand and good prospects for their own corn harvest. According to various estimates, the delivery of 5-7 shipments of barley with a volume of 400 thousand tons to China was canceled in the 4th quarter of 2021. in China, low profitability of animal husbandry reduced demand for feed grain, and traffic jams in major ports of the country delay import supplies.

Traders estimate that China imported 1.3 million tons of barley in August, mainly from Ukraine, France and Australia. According to official data, barley imports to China for 7 months of this year amounted to 6.42 million tons, which is 124.8% higher than the corresponding figure in 2020.