An increase in corn exports from Brazil and a decrease from the US are putting pressure on quotes

Brazil is ramping up corn harvesting and as of August 7 had already threshed 64.3% of the second crop, compared with 80% at the same date last year. Rainfall somewhat delays harvesting, especially in the south.

Against the backdrop of high yields, analysts are adjusting production forecasts, and farmers are stepping up sales.

The AgRural agency, due to better-than-expected yields, raised its forecast for the country’s total corn production in MY2022/23 by 3.1 million tons to 135.4 million tons compared to previous estimates (USDA estimated it at 129 million tons in July). in particular, corn of the second harvest – by 2.7 to 105.6 million tons.

Experts from the Brazilian agency Anec expect corn exports to reach 8.8 million tons in August, compared to 6.5 million tons in July and 6.9 million tons in August 2022. This will lead to a reduction in corn exports from the United States and a corresponding adjustment of forecasts.

According to NASS USDA, the number of U.S. corn in good or excellent condition rose 2% for the week to 57% as of Aug. 6 (58% last year), but hot weather next week could reduce yield potential.

On the eve of the USDA’s August report, analysts lowered the forecast for corn production in the US to 385 million tons due to a decrease in yield from 177.5 to 175.5 bushels/acre. However, the estimate of ending stocks was not changed due to the increase in opening stocks and the reduction in exports of the old crop at the end of the season.

After the floods, China may increase demand for American corn, especially given the blocking of exports from Ukraine’s Black Sea ports.

As of August 4, the US exported only 35.2 million tons of corn, which is 49% less than last year’s pace (52.5 million tons) and the USDA forecast (41.9 million tons). During August, it will be possible to ship no more than 2 million tons of corn.

The peak of weather risks for corn in the US has passed, but August weather will significantly affect the development of crops.

Yesterday on the Chicago Stock Exchange, September corn futures fell 1% to $189.4/t, and December futures fell 0.9% to $194.6/t, matching last month’s level and 15% below the peak effective July 22.

Tags: Ukraine, corn, Brazil, prices, USA