Corn prices remain under pressure from bearish factors
the corn market Yesterday remained under pressure bearish factors: another fall in oil prices, increasing import duties on corn in the EU and a good rate of sowing in the United States and Ukraine on the background of favorable precipitation.
After the previous growth of oil prices, traders began to take profits, resulting in the slowdown of 3.5%. Moreover, it became clear that the U.S. economic recovery and demand for oil will be very slow.
According to the weekly report of the EIA,the oil reserves in the US grew by 4.59 million barrels to 3-year high 532,22 million barrels. At the same time stocks of gasoline by 9.3%, and the distillate is 11.9% higher than the average 5-year level.
for the First time in the last 10 weeks increased ethanol production in the United States – з537 to 598 thousand barrels/day, allowing to process during the week of 1.47 million tonnes of corn, although last year the weekly processing of corn was 2.8 million tons.
Warm weather with moderate rainfall in the Midwest has boosted sowing corn. On 3 may it is planted on 51% of the area compared with 39% on average for 5 years at that date. Until the end of the week the farmers will try to complete sowing, because then the heavy rains begin.
the July corn futures in Chicago yesterday fell to Friday 124,4 $/t
Another reduction in corn prices in the US have led to an increase in the import duty on maize, sorghum and rye in the EU from 5.27 to 10.4 €/t as prices in the United States is the basis for calculation of import customs duties of the EU.
This will slow corn imports to the EU, which has now reached 17,471 million tonnes and 14 per cent behind the corresponding indicator 2018/19 Mr.
the Increase in fees reduces the export competitiveness of Ukrainian corn, which puts pressure on its price. Ukrainian corn as a Romanian, I propose to put in may for 162 €/t FOB. However, even in the absence of import duties and logistics costs, the demand for Romanian maize in Europe are low, as Brazilian corn offer to supply in July-August at a significantly lower price.
Ukrainian farmers won't sell corn at 5200-5300 UAH/t or 162-166 $/t at the port, so traders to execute contracts forced to raise the price of 1-2 $/MT for deliveries in may. Prices for delivery in June do not exceed 163-164 $/ton, and the supply of new crop in October-November fell to 140-142 $/t
As of may 5, Ukraine's corn planted 3.96 million hectares or 73% of the target of 5.39 million hectares. Recent precipitation will have a positive impact on the crops and improve the prospects of the next harvest.
South Korean recycler optional origin this week purchased two cargos of Brazilian corn for October delivery at a price of 172 $/t C&F, confirming a gradual decline in prices for grain of new harvest due to oversupply.
