WASDA report for corn was more bearish than expected

In an April report, the experts USDA corn changed only data for the United States, which has reduced the forecast of consumption and increased transitional stocks. Forecasts for other countries is almost not changed, resulting in the estimate for ending stocks in 2019/20 MG also increased.

the Forecast of the annual volume of corn processing for ethanol in the U.S. reduced immediately by 9.52 million tonnes to 128,27 million tonnes due to a sharp decline in demand for motor fuels and ethanol as a result of the epidemic Covid -19. At the same time the estimation of domestic use of corn for feed production increased by 3.8 million tons, making the total consumption of grain in the country will decrease by 5.21 million tonnes to 308,37 million tons.

export Forecast of corn was left unchanged, though analysts expected that it will reduce, given lower than last year, export growth.

Due to reduced consumption ending stocks of corn in the U.S. will grow by 10% to 53,15 million tons, while experts expected them to increase by just 5%.

Forecast world production of corn increased by 1 million tonnes to 1113 million tonnes, as increased harvest in the EU from 65 to 66.6 million tonnes partially offset decreases in South-East Asia by 0.84 million tonnes.

Balances for Brazil, Argentina and China left unchanged, while analysts had expected lower production in South America and increasing imports by China.

Evaluation world imports of corn increased by 0.4 million tonnes to 169,03 million tonnes, thanks to increased purchases by South Korea to 114 million tons.

Forecast world consumption of corn decreased by 5.3 million tonnes (mainly due to USA), resulting in the global ending stocks will grow by almost 2% to 303,17 million tonnes, though experts believed that they would grow by only 0.4% to 298,5 million tons.

the Increase in carryover stocks amid forecasts of increased production of corn in the United States and Ukraine in 2020/21 MG and a sharp reduction in the consumption of motor fuel continues to put pressure on prices.

But the may corn futures in Chicago yesterday rose 0.5 percent to 133 $/t, despite the pessimistic data of the USDA report. The market was supported by news that China in its own balance of supply and demand increased the estimate of corn imports by 30%, giving traders reason to hope that activization of purchases of U.S. corn in the framework of signed trade agreements.

the Decline in oil prices and currency devaluation in Brazil and Argentina reduces the competitiveness of U.S. corn, so in the coming months to enhance the sales traders will be forced to lower export prices.

In Ukraine, the demand price of corn has dropped to 174-175 $/t FOB, while the bid prices for deliveries in April-may remained at the level of $180/t FOB. Manufacturers do not want to sell corn even 169-170 $/t CPT-port, which corresponds to 180 $/t FOB.

After the rain in Brazil, which improved the condition of corn second crop, experts Conab increased its harvest forecast for corn safrinha to 75.4 million tonnes, bringing its total yield will be 102 million tonnes, 1 million tonnes higher than the figure recorded 2018/20 Mr.