The USDA reports support corn prices in the short term

2020-12-10 12:05:07
Machine translation
The USDA reports support corn prices in the short term

Today, the market expects the publication of the balance of demand and supply of corn from the USDA, which can be adjusted production forecasts for the United States, Argentina, Brazil and Ukraine, as well as reduced the estimate for ending stocks by 2 MMT to 289 MMT due to decreased production in South America.

 

Traders interested in whether the reduced forecasts for corn harvest in Argentina and Brazil because of the shortage of rainfall at the start of the planting season, or they will be already corrected in the January report.

 

the average data Agricensus conducted a survey of the analytical Agency lowered the forecast corn crop in Brazil by 1 million tonnes to 109 million tonnes (102 million tons in 2019/20 MG), and in Argentina – 0.3 million tons to 49.7 million tons (51 million tons in 2019/20 MG).

 

the Forecasts of local analysts are more pessimistic. So, experts Conab estimated corn crop in Brazil in 2020/21 MG 104,9 million tonnes, and analysts of the exchange BAGE believe that Argentina will collect 47 million tonnes of corn.

 

it is Expected that the experts will increase  USDA forecast of the corn harvest in Ukraine by 0.5-1 million tons Now with 96% of areas harvested 28 million tons, so you can count on the actual collection within 30 million tons.

 

Changes may undergo data on production, consumption and export of corn for the United States, because the processing volumes for ethanol grows and exports continues to slow.

 

According to the report of EIA, for the week ethanol production in the U.S. rose by 17 thousand to the highest since March 20 week level 991 thousand barrels/day, which is only 5.6% below last year's level. Ethanol stocks increased by 834 thousand barrels to 22.08 million barrels. Experts expected reduction of consumption of ethanol on the background of the quarantine restrictions, but the producers increased their production, hoping for a revitalization of consumption.

 

In today's report, export sales of corn in the U.S. analysts expect to see a reduction in export sales due to low demand from China.

 

Yesterday, corn futures in Chicago rose 1.2% to 167 $/t against the background of an unexpected increase in ethanol production and purchase activity funds new futures ahead of USDA report in anticipation of further price increases.

 

Rise in price of futures is primarily due to the appearance on the market of a considerable mass of money issued by the U.S. government for assistance from Covid-19, which invested in futures. Although the actual global balance of corn better than last year.

 

In Ukraine, with increased offers from manufacturers of corn prices at the port fell to 208-214 $/t or 7100-7200 UAH/t, as export demand remains low due to high prices and previous agreements already executed, so traders are holding back purchases in anticipation of new market trends.

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