Reduction in the consumption of corn weighs on prices

2019-03-07 12:06:55
Machine translation
Reduction in the consumption of corn weighs on prices

Ahead of Friday's USDA balance other analysts have published their own forecasts of production and consumption of corn, which worried traders who develop trading strategies. Estimates of production has not changed, however, attract the attention of the consumption forecasts, which are decreased due to the reduction in the number of pigs in China and Vietnam as a result of the ASF.

 

the Chinese Agency of agriculture research and feed JCI, has lowered the forecast of consumption of feed corn in 2018/19 Mr (which ends in September) compared to the previous estimate of 9% to 162 million tonnes, while the import forecast by 40% to 8.5 million tons.

 

Consumption of corn feed sector in China is estimated at 162 million tonnes, which is 17% or 32 million tonnes inferior to the USDA forecast.

 

According to JCI, Achs due to the average number of sows decreased by 17%. Outbreaks of ASF were recorded in Vietnam, increasing the anxiety of traders concerning reduction of demand for corn from South America.

 

This is already reflected by the lower purchasing prices of corn by South Korean refiners, which bought U.S. corn for the price of 195 $/t CFR.

 

against this background, the may corn futures in Chicago yesterday fell 1.9% to is 146.1 $/t. the prices presses a significant drop in the neighboring soybean market, which will suffer as a result reducing consumption of China.

 

In Ukraine, the fall in maize prices stayed at the level 158-159 $/t CPT-port due to reduced sentences. The sellers expect purchase activity Turkey and India, which may soon reduce the import duty on maize from 60% to 10%. Due to the strengthening of the hryvnia in the last month by 2% to 26.5 UAH/$ the purchase prices at the port fell to 80-100 UAH/t to 4900-5050 UAH/t

 

Reduction of consumption can break the hopes of traders to intensify in March and April of demand for Ukrainian corn from China. Amid competition from Argentine corn of the new harvest to enhance sales, they will need to continue to lower prices.

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