China's decline in imports and ethanol consumption could lower corn prices

Recently, corn prices in Ukraine have been supported by delayed harvesting and higher oil and wheat prices, but soon the market will be under pressure from New factors – falling demand from China and reduced consumption by the US bioethanol industry.

According to estimates of the Chinese state Information Center for grain and oilseeds, corn prices in the country in 2021/22 MG will decrease due to an increase in feed grain imports in the previous season and a record current corn harvest. From record may highs, corn prices in China have already fallen by 13%. It is expected that in my 2021/22 the country will reduce corn imports from 29 to 20 million tons compared to the previous season (against the USDA forecast of 26 million tons), although in previous years it imported an average of 7 million tons of corn. A decrease in imports by China against the background of an increase in world production by 60 million tons, especially in the United States and Ukraine, may lead to a significant drop in prices, as happened with barley prices, although the global balance of barley in the current season is 10 million tons less than in the previous one.

According to the EIA Association, ethanol production in the United States is declining for the second week in a row, and now it has decreased by 12 thousand barrels /day to 914 thousand barrels/day, although analysts expected it to grow. Ethanol reserves for the week increased by 0.12 million barrels to 20.22 million barrels. Ethanol prices for the week fell 4% to 2 2.37/gallon or 0 0.63/L.

The biofuel market is awaiting the White House's decision on biofuel mixing volumes for 2021 and 2022. As reported, the Environmental Protection Agency (EPA) is considering reducing the annual commitment to use renewable energy sources, which sets the amount of ethanol, biodiesel and advanced biofuels required for annual mixing.

December corn futures at Chicago SWOT rose 1.2% to.212.2/ton yesterday, despite falling oil prices and declining ethanol production.

November corn futures in Paris rose by €3.25/ton yesterday to the highest level since May 7 of €230/ton or.266.9/ton amid a delay in harvesting and an increase in the competitiveness of French corn due to rising prices in Ukraine.

October Black Sea corn futures on Chicago SWOT also rose вчора 1/ton to.268.5/ton yesterday, rising 1% over the week.

In Ukraine, purchase prices for corn only due to the delay in harvesting remain in the port at the level of 2 248-250/ton, but soon the ports may become overstocked due to low export demand.

In Brazil, active corn sowing in anticipation of precipitation will be an additional factor of pressure on prices.