The poor condition of the crops strengthens corn prices in Chicago

next week the warm and dry weather in the Midwest USA will replace the heat. The development of corn is delayed, so the weather during grain formation will have a significant impact on yield. More traders worried about the lag in the development of soybean crops that require more heat and moisture in August and September, which is unlikely based on weather forecasts.

the Market expects the August report USDA with the final data on the area of sowing of soybean and corn. However, even in the case of increasing the number of crops area for harvest could be reduced due to transfer of crops that will not Mature for silage.

Square planting and harvesting of corn in the United States differ by 9-10%, but this year this ratio may increase to 11-13%. In July USDA evaluated the acreage at 91.7 million acres, the collection – at 83.6 million acres, the gross harvest of 347 million tonnes Before the publication of the August report, the analysts reduced the average evaluation of areas for harvest to 80 million acres, the yield – to of 164.7 bushels/acre, production to 13.2 billion bushels or 335 million tonnes production Estimates from different agencies are in a wide range 323-352 million tons.

September futures have grown for a week, and already amounted to 161.4 m $/t in December – 164,3 $/t. Yesterday they supported the rise in soybean prices by 2.5%, despite low export sales, which amounted to 42,5 thousand tons on expectations of 100-200 thousand tons.

Experts S&P Global Platts Analytics estimate corn exports from the U.S. to 2019/20 MG at 50.8 million tons, while the USDA predicts its level 54,61 million tons.

South America increases competition in the corn market, with increased harvest in Brazil and the devaluation of local currencies. Vietnam and South Korea, which are major buyers of American corn, now prefer the cheaper South American.

Brazil from may to July exported 8.7 million tons of corn, 7.3 million tons higher than in the same period last year.

Argentina from March to July 15, exported 16.5 million tons of corn, whereas last year during this period, was shipped to 11.13 million tonnes.

As of August 6, the export price of corn in Brazil was 171 $/MT FOB Paranagua Argentina – 163 $/t FOB Up River, far below rates in the USA is 185 $/MT FOB Gulf. In Ukraine, corn for November delivery offered at 172-174 $/MT FOB, indicating a possible further decline in prices.