Corn prices are rising in spite of falling oil prices

Yesterday, oil prices and stock indexes declined sharply on the news about limiting travel and flights from the UK to prevent the spread of the mutated strain coronavirus.

After seven weeks of growth in futures for Brent crude oil yesterday fell 3% to 50.6 $/barrel and WTI crude oil – by 2.7% to 47.7 $/barrel. This week the fall of oil prices will continue as traders will try to close positions in anticipation of the Christmas holidays.

the decrease in oil prices would have to lower the price of corn, however, they were supported by the rapid growth of neighbouring markets for soybeans and soybean meal due to the strike in Argentina. Therefore, the March corn futures rose yesterday by 0.7% to 173,3 $/t

corn Exports from the U.S. last week fell by 17% to 762,9 thousand tons (of which 272 thousand tons were shipped to China), which was lower than expected by traders and increased pressure on prices in early trading.

Since the beginning of the season, the United States exported 12.7 million tons of corn, which was 66% higher than the corresponding figure of last year, but to reach the USDA's projected 67 million tons, the country needed weekly to ship 1.5 million tons of grain.

On the physical markets, prices of U.S. corn are 210-215 $/t FOB, Ukrainian – 227-230 $/t FOB, Argentinean and Brazilian 230-240 $/t FOB, which should increase export demand for corn from the US. However, it remains low, especially from the countries of South-East Asia, the supply of corn which will have a price of 255 $/t C&F, because Australia increased its wheat supply by price 260-270 $/t C&F.

High bid prices and reduce export demand for Ukrainian corn, especially on the background forecast reduction of imports into the EU.

compared with the November forecast of experts of the European Commission lowered its estimate of corn imports in EU 2020/21 MG for 3 million tonnes to 19 million tonnes, which is forecast by the USDA, and the evaluation of corn production in the EU increased by 2.3 million tonnes to 62.5 million tonnes In the last week, the EU imported 350 thousand tons of corn, and since the beginning of the season to 7.9 million tons, which is 24% below the corresponding period last year.

the Pace of corn exports from Ukraine more and more behind last year. As at 21 Dec shipped 7.7 million tons of corn, which is 40% less than at the same date in 2019

For the week, the purchasing prices for maize in Ukraine increased by 1-2 $/t to 215-217 $/t or 7200-7250 UAH/t. a Further increase in limits of low export demand and the containment of sales producers, what makes traders carefully plan the shipment.