An increase in corn harvest forecasts in the world and in Brazil increases the pressure on quotations

Corn prices, after a sharp rise caused by the shelling of Ukraine's Black Sea ports, fell yesterday under the pressure of higher crop forecasts in Brazil and in general in the world.

IGC experts increased the forecast of world corn production in 2023/24 MR by 9 million tons to 1.22 billion tons, in particular for the USA - from 373.4 to 383.7 million tons, while the USDA estimates them at 1.224 billion tons and 389.1 million tons, respectively.

Agroconsult expects the 2022/23 FY Brazil safrinha corn crop to grow 16% year-on-year to a record 107.2 million tons, and total corn production to reach 137.4 million tons, compared to USDA's estimate of 133 million tons in July. FY 2022/23 corn exports will increase year-over-year by 7.6 million t to 54 million t (USDA 56 million t), of which 5 million t will be purchased by China.

Yesterday on the exchange in Chicago, September corn futures fell by 1.6% to $211.5/t, and December - by 1.2% to $215/t.

Forecasts of dry and hot weather in the US next week have so far not affected quotes, as major corn growing regions have experienced heavy rains this week.

Export sales of corn from the USA for July 7-13 decreased by half compared to the previous week to 236.8 thousand tons, and in total for the season amounted to 33.87 million tons from the forecasted 41.1 million tons, so the export forecast for 2022/23 MR will be reduced again. The drop in export rates is due to the fact that China is reducing the purchase of corn in the US and increasing it in Brazil.

Limiting supplies from Ukraine will not help the US to increase exports, as Brazil is rapidly increasing the volume of offers, and buyers are actively buying cheaper and better quality corn of the new crop.