The market yesterday ignored the impressive USDA forecast for corn planting in the U.S. in 2020

2020-04-01 12:05:16
Machine translation
The market yesterday ignored the impressive USDA forecast for corn planting in the U.S. in 2020

Typically, traders look forward to the first official USDA forecast on crop areas of soybeans and corn in the USA which will publish on March 31, as it determines the future price trends. But yesterday's impressive data report almost no effect on the market.

 

Now everyone is focused on the spread of the epidemic Covid -19, which in the USA are sick more than 190 thousand people and only for the last day killed 700, that some States have strengthened quarantine measures.

 

According to the USDA report, the acreage under corn under the harvest 2020 will increase compared to the previous year, to a record 89,7 96,99 million acres, while traders assessed their в94-94.5 million acres. Under normal yield of 170 bushels/acre (of 10.66 t/ha) corn crop will reach a record 419 million tonnes, which significantly exceeds the needs of the US market. In 2019, the corn harvest amounted to 345 million tonnes in 2018 – 364 million tons.

 

the Decrease in business activity in the world will reduce fuel demand and amid falling oil prices are 2.5 times this will lead to a sharp reduction in demand for ethanol, so a significant volume of maize used for its production in the United States and Brazil, collapsed the market.

 

After the publication of the report of the may corn futures in Chicago fell to 132,2 $/t, but before the end of the session, recovered to a total of 133.9 $/t

 

Quotations supported the data of the USDA report on the balance of which as of March 1 corn stocks in the U.S. was $ 202 million tonnes, which is 7.7% below last year's level and 4.4 million tonnes less than analysts had expected.

 

Domestic consumption and exports of corn during the December-February amounted to 87.6 million tonnes compared to 84,3 million tons over the same period 2018/19 Mr.

 

Traders expect today's report on ethanol production for the week, the volumes of ethanol production and corn consumption will be reduced. But they hope that farmers will make plans for planting corn in favor of soybeans and wheat because of MSG conducted a survey before the collapse in oil prices, which will reduce the use of ethanol.

 

the Growth of prices for Ukrainian corn in the week before 181-182 $/t FOB reduces its competitiveness compared with the us, which will allow US traders to intensify the sale of corn in April-may, lowering prices and taking advantage of the delay of shipments from the ports of Argentina, where quarantine was imposed export new crop recovers very slowly.

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