Corn prices fall on forecasts of increased production in the United States

The decision of the USDA a month earlier to publish a report on the areas of sowing and harvesting soybeans and corn has been putting pressure on quotes for a week. Traders expect a sharp increase in the area of sowing, as a result of which production forecasts will be significantly increased.

Under the pressure of this news, September corn futures on the Chicago SWOT fell by 11.5% to 1 195.3/ton in two weeks, and December - by 7.6% to.201.6/ton, which is the lowest level in the last 7 months.

According to the average estimate of analysts, the area of corn harvesting in the United States will increase to 85.1 million acres, the average yield – to 175.8 bushels/acre, and total production – to 379.5 million tons, while in the August report, the USDA estimated the area at 84.5 million acres, yield at 174.6 bushels/acre, and production at 374.6 million tons compared to 360.3 million tons in the 2020/21 season.

If the new USDA forecast exceeds analysts ' estimates, then corn prices will fall even more.

November corn futures on Paris ' Euronext fell another €1.5/ton yesterday to €213.5/ton or € 252.5/ton, down 3.6% in two weeks.

October Black Sea corn futures at Chicago SWOT fell вчора 1.5/ton to.257.25/ton yesterday, losing only 2.4% in two weeks, as the drought will reduce the corn harvest in Russia and it is unlikely to reach the USDA forecast of 16.5 million tons, although for Ukraine the forecast of a record harvest remains at the level of 37-38 million tons, which is slightly lower than the USDA forecast in August of 39 million tons.

In Ukraine, prices for new crop corn remain in ports at the level of 2 240-245/ton or UAH 7300-7400/ton, but the pressure on them increases the fall in prices for feed barley and feed wheat. Producers have received significant funds due to high grain prices, so they are in no hurry to sell their products in anticipation of further price increases. Restraining sales by producers recently had some results, and buyers were forced to raise prices to purchase the necessary volumes, especially food wheat and barley.

A significant corn harvest in Ukraine will increase the volume of offers even at current prices, and producers will postpone sales of wheat and barley to next year, expecting high prices, as in the previous season.