Improving weather in South America and falling oil prices, lower corn prices

Yesterday, world oil prices dropped amid disagreements between OPEC members+ about the prospects for recovery of demand. And after them, fell and corn prices.

Precipitation in Brazil first, increased pressure on the corn market, but the market was supported by news of a possible re-seeding of part of the soybean crops, which will delay corn sowing the second crop.

Experts StoneX reduced compared with the October assessment, the forecast corn production in Brazil in 2020/21 MG of 1.76 million tonnes to 109,34 million tonnes, which is significantly higher than last year's 102 million tons.

In Argentina, dry weather speeds up the harvesting of wheat and planting of corn, but a negative effect on crops, leading to higher prices and deter sales by farmers.

Yesterday after a meeting of OPEC Ministers+ was suddenly interrupted for further consultations, oil prices fell 2.5-3%. Recall that in late November the price of Brent oil increased by 27% and crude oil - by 26.7% on the news about the successful testing of vaccines against Covid-19, which will lead to restoration of demand for oil.

on Monday the two sides agreed to continue the current limitations of oil production in the first quarter of 2021, at 7.7 million barrels/day, and Tuesday this option had to coordinate with other OPEC members+, but the UAE refused to sign for more than the other participants, the share of production cuts. Compared to 1 kV 2020 Saudi Arabia should cut production by 9%, Russia – 18%, UAE 22%. Iraq and Kazakhstan also unhappy with the extension of the period of restriction of production.

the December futures on corn due to low export sales yesterday fell another 2.5% to 165 $/t, having lost growth of the last two weeks.

Export sales of US corn for the week rose by 53% to 1,666 million tonnes, and just season reached 36.9 million tonnes, which is 162% higher than last year's pace. Actual exports for the week rose by 7% to 890 thousand tonnes, due to increased purchases by China from 200 to 340 thousand tons, but remains at the lower end of expert's expectations. Since the beginning of the season, the United States exported 10.1 million tonnes from a projected 67 million tons of corn, therefore, must continue weekly to export 1.3-1.4 million tons.

In Ukraine, purchasing prices for corn decrease with increasing offers. Traders move to buy at market and offer in the port 215-220 $/t or 7400-7500 UAH/t, because the export prices for January deliveries of Ukrainian corn do not exceed 230-233 $/t FOB.

Now in Ukraine, with 94% of the area harvested 26.8 million MT of corn at an average yield of 5.3 t/ha (7.2 t/ha in 2019), so the harvest forecast remains at the level of 28.5 and 29.5 million tonnes Already exported 5.3 million tons of corn, which is 2.9 million tonnes inferior to the corresponding indicator 2019

Improved weather in South America against the background of increasing U.S. exports will increase pressure on prices of Ukrainian maize in December, domestic producers, it is advisable to accelerate sales, while prices in the port achieved a high level of $220/t