After updating the 3-year high, oil prices fell and increased pressure on the corn market

After updating a 3-year high on Tuesday, December Brent crude futures on the ICE Futures Europe exchange fell 3.6% to 8 83.43/barrel yesterday on news of an increase in the incidence of covid-19 in Europe and the emergence of new cases in China, as well as against the background of the resumption of negotiations with Iran on a nuclear program.

The fall in oil prices will increase pressure on the quotes of corn, which last week after oil rose in price by 3.7%.

December WTI crude futures on the NYMEX exchange hit a 7-year high on Tuesday, and yesterday fell 3.5% to 8 81.68/barrel under pressure from profit-taking traders and a bearish weekly report on US oil reserves.

According to the EIA, during the week, oil reserves in the United States increased by 4.3 million barrels, although experts expected them to decrease by 100 thousand barrels. Ethanol production is growing for the second week and has already reached the level of 1.106 million barrels per day, which is the second largest historical average weekly production volume after a record 1.108 million barrels per day in December 2017. Ethanol reserves for the week decreased by 155 thousand barrels to 19.925 million barrels against the background of rising gasoline prices and demand for ethanol.

Amid an increase in ethanol production, December corn futures on the Chicago Stock Exchange rose 2.3% to.218.9/ton yesterday, adding 8.4% in two weeks.

Falling oil prices and data on weekly export sales from the United States today will be the main factors influencing prices, along with other fundamental factors such as increased yields in Brazil, Argentina and South Africa.

According to Anec, Brazil exported 2.143 million tons of corn in October, up from 2.314 million tons a year ago. This indicates an increase in sales of corn of the old crop by farmers against the background of improving weather conditions for the new crop.

The USDA representative in Argentina raised the forecast for the country's corn harvest in 2021/22 MG by 1.5 million tons to 54.5 million tons, while in October the USDA estimated it at 53 million tons.

According to South African authorities, corn production in the country in 2021 will increase by 6% compared to the previous season from 15.3 to 16.211 million tons, while the USDA in October estimated it at 17 million tons.

In Ukraine, purchase prices for corn in ports remain at the level of 7700-7800 UAH/ton or 257-260 $/ton, but at grain elevators they continue to fall against the background of rising transportation costs.