After speculative growth, corn prices decline

2021-07-05 12:04:21
Machine translation
After speculative growth, corn prices decline

After the release of USDA reports on grain stocks and acreage in the United States, Chicago corn prices jumped by 7%, but on Friday the market turned around and July corn futures fell by 3.3% to четвер 274.4/ton, almost leveling Thursday's growth, and December fell by only 1.6% to.227.9/ton, adding almost 11% in price from Monday. Today in the United States, the stock exchanges will have a day off to celebrate "Independence Day", so the markets will focus on trading on the European stock exchange in the Black Sea region.

 

The fall in prices for the old corn crop continues under pressure from falling prices for feed wheat and especially barley in the Black Sea region, even despite deteriorating forecasts for the corn harvest in Brazil. StoneX analysts lowered their forecast for Brazil's gross corn harvest in my 2020/21 from 89.68 million tons to 87.93 million tons, compared with the USDA's June forecast of 98.0 million tons.

 

Against the background of good yields and large supply, over the past week, prices for Black Sea barley have fallen by 1 15-20/ton to the level of about F 210-215/ton FOB, and feed wheat prices have fallen to the level of about 2 225-230/ton FOB, which is much lower than the offers for the supply of old-crop corn at the level of about 2 265-275/ton FOB. Forward prices for new crop corn in Ukraine last week were also at a high level of about 2 225-235/ton with delivery to the port in October-November, despite forecasts of crop growth to 37-38 million tons, as well as a record volume of forward sales, which, according to various estimates, already exceeds 7-8 million tons. 

 

 

Corn quotes on stock exchanges this week will be under additional pressure from a possible reduction in demand from the ethanol industry.

 

 

The District Court of Appeals of Washington, DC, ruled that the Environmental Protection Agency (during the Trump administration) exceeded its authority by obliging oil refineries to produce gasoline with an ethanol content of 15% not 9, but all 12 months of the year, which can now lead to a decrease in the level of consumption of ethanol for the production of which in the United States about 125-135 million tons of corn per year.

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