Corn prices remain under pressure from low demand

Low demand for American corn increases pressure on prices, but the market expects increased sales, especially given the decline in export forecasts from Brazil by almost half compared to the previous season.

According to analysts, Brazil in 2020/21 MG will reduce corn exports to 17-18 million tons compared to 35.2 million tons in 2019/20 mg and the USDA forecast in August 23 million tons. usually, second – crop corn is exported most actively in July-September, but this year, due to a poor harvest, only 3 million tons were shipped in July,in August, according to Anec estimates, exports will amount to 4-4. 74 million tons (6.68 million tons in August 2020). in general, for 8 months of 2021, it will reach 10.68 million tons compared to 14.34 million tons for the same period last year.

Traders hope that buyers will start actively buying American corn, which remains the cheapest on the world market.

On the Chicago SWOT, December corn futures are trading at 2 216.5/ton, and on the physical market, corn from the United States is offered at.250-260/ton FOB US Gulf, while Brazilian corn is offered at. 265-270/ton FOB.

During the week, the number of corn crops in the United States in good or excellent condition decreased by 2% to 60% (64% last year), while areas in arid conditions increased by 1% to 38% (26% last year).

Export sales of corn from the United States for the week amounted to a slight 684 thousand tons, but in general they have already reached 19.3 million tons, which is 44% higher than last year's pace. Actual exports for the week decreased by 8% to 760.5 million tons,and in general in the season amounted to 66.2 million tons compared to 42.2 million tons a year ago, but certainly by September 1 will not reach the USDA forecast of 70.5 million tons.

IGC experts in a new report raised the forecast of global corn production in 2021/22 MG by 1 million tons to a record 1.202 billion tons, which is 75 million tons higher than the harvest in 2020/21 MG. In addition, the forecast for global consumption was raised by 2 million tons to 1.201 billion tons (1.156 billion tons in 2020/21 MG), although the estimate of Final reserves was left at 270 million tons due to lower estimates of World Trade.

December Black Sea corn futures have risen by 7 7/ton to.266/ton since the beginning of the week, recouping last week's decline.

Forward prices for corn in the ports of Ukraine remain at the level of 2 245-250/ton or UAH 7500-7600/ton, but the main players have already fulfilled their sales programs, so activity in the market is low.

Despite the lack of moisture in some northern and eastern regions, in general, the weather contributes to the formation of a good corn harvest in Ukraine, so forecasts remain at the level of 37-39 million tons.