Corn prices fell by 4% on crop growth forecasts

Yesterday, quotes for major agricultural products fell on world stock exchanges under the pressure of approaching harvesting and improving production prospects. The leader of the fall was corn futures in Chicago, the decline of which accelerated after the publication of the June balance sheet of the USDA.

July futures fell 4% to 2 259.4/ton, while December futures fell 5.15% to.228.7/ton.

The main factors of pressure on prices remain high rates of sowing in the United States, a possible increase in sowing areas, precipitation forecasts in the Corn Belt and a likely reduction in demand from the ethanol industry.

Reuters reported that President Biden's administration plans to reduce mandatory biofuel requirements, which could reduce demand for ethanol from corn and biodiesel from soybeans.

The market was not supported even by good export figures, which, according to the weekly report of the USDA, grew by 8% to 1.554 million tons over the week, although it was lower than traders expected. In total, 53.968 million tons of corn have already been exported during the season (although USDA experts raised the forecast to 72.39 million tons), so to reach the forecast figures, you need to ship 1.67 million tons of corn every week.

The heat wave in the United States, especially in the western regions, negatively affects the state of corn crops. According to USDA monitoring data released at the end of trading, the number of corn crops in good or excellent condition for the week decreased by 4% to 68%, although a year ago it was 71%. This will support quotes at today's trading, although the rain promised for the next 5-7 days will slightly improve the condition of crops.

On the Euronext exchange, August corn futures fell by €1.25/ton yesterday to €259.75/ton or. 315/ton, while November futures fell by €3.25/ton to €207.5/ton or € 252.4/ton.

The European Union increased corn imports by 50% to 340 thousand tons in a week, and in general purchased 13.9 million tons in the season, which is 27% lower than last year's pace, and significantly exceeds the USDA forecast of 12 million tons.

In Ukraine, purchase prices for corn are falling following global prices and under pressure from the strengthening of the hryvnia. Prices for the old crop decreased by 200-300 UAH/ton to 8250-8400 UAH/ton or 2 268-275/ton, and for the new crop – by 5 5-10/ton to.240/ton with delivery to the port.

Heavy rains improve the condition of corn crops, the area of which increased by 17% compared to last year, so that crop forecasts at the level of 36-38 million tons look quite real.