Acceleration of corn harvesting in Argentina and Brazil increases the pressure on the quotes

Corn prices in Chicago remain under pressure from increased planting areas and significant stocks in the United States, and the acceleration of the harvest in South America in the near future will not allow quotes to grow.

According to the Buenos Aires Grain Exchange, Argentina harvested corn by 54.9%, the average yield is 6.93 t/ha, and the grain moisture decreased to optimal values.

AgRural Agency reports that in Brazil, amid dry and hot weather, the second crop corn has been harvested on 49% of the area (33% last year), which is a record for the entire period of the company’s observations. In the states of Mato Grosso and Goiás, corn yields are good, but in other states they are below average due to the prolonged lack of rainfall.

The StoneX agency lowered its forecast for the corn harvest in Brazil from 121.75 to 121.18 million tons, which corresponds to the USDA forecast.

December corn futures on the Chicago stock exchange are trading at the lowest since the end of 2020 at 165,8 $/t (-19% for the year) under pressure from favorable weather for crops and significant stocks in the United States, which is 22% higher than last year.

During June 21-27, corn exports from the United States decreased compared to the previous week by 29% to 819,6 thousand tons, and in General in the season reached 42.48 million tons, which is 28% ahead of last year’s pace.

At the same time, the quotes support high rates of corn processing in the United States. According to the USDA, in may, the volume of corn used for ethanol production increased compared to April by 7.4% to 12.9 million tons, and in total in the season reached 103.3 million tons or 74.6% of the annual forecast USDA, which corresponds to the average 8-year average.

According to the NASS USDA, the number of corn crops in good or excellent condition for the week decreased by 2% to 67% (51% last year), and flowering of corn occurs on 11% of the area, which is 5% higher than the average 5-year average.

Traders’ attention is focused on the weather in Ukraine and Russia, where the heat wave could negatively affect corn crops. Therefore, it is now very important how much precipitation will fall this week in these regions.

In Ukraine, there is almost no export demand for corn, and the domestic market offers 6800-7200 UAH/t with delivery to the plant, which generally satisfies sellers who still have stocks.

Tags: USA, Argentina, Ukraine, corn, Brazil, prices