Corn prices remain under pressure from the harvest in Brazil and forecasts of increased yields in the US

In anticipation of the July USDA report, analysts publish their own forecasts, according to which the US corn crop will increase by 6.5 mln tonnes to 383.9 mln tonnes compared to June estimates due to the expansion of planted areas. Also, it is expected that the estimate of ending stocks in 2023/24 MY will be increased, which will negatively affect prices.

amid favorable weather for crops, the December corn futures in Chicago for the month fell by 14.4% to the lowest since the end of 2020 level of 160,8 $/t, although in April 2022 they were twice as expensive.

According to the NASS USDA, in the United States the number of corn crops in good or excellent condition for the week increased by 1% to 68% (55% last year), and flowering was recorded on 24% of the area, which is 10% higher than the average 5-year average. Precipitation forecasted in the corn growing regions will have a favorable impact on the crops in this phase of development.

According to Bloomberg, corn prices have fallen for 6 consecutive quarters, the longest decline since 1959. As a result, U.S. farmers have accumulated the largest corn stocks since 1988.

According to USDA estimates, in 2024, farmers’ incomes in the country will decrease to the lowest level since 2006 and will be 1.7% lower than the 20-year average and 40.9% lower than the record level of 2022, adjusted for inflation. At the same time, the United States is rapidly losing its position as the world’s leading corn exporter due to increased competition with Brazil. In addition, Argentina recently sent the first batch of corn to China in 15 years.

The Conab agency reports that in Brazil, as of July 7, the first-crop corn has been harvested on 95% of the area (96% last year), and the second-crop corn on 61% of the area (29.3% last year).

In Ukraine, this week will be dominated by heat of 30-35 ° C, which will negatively affect the corn crops, which are generally in good condition due to the June rains. Lack of precipitation and high temperatures during the flowering period (in the next 2 weeks) may reduce the potential of the future harvest.

Demand prices for corn of old and new harvest with delivery to the Black Sea ports are still 160-170 USD/t, but farmers are in no hurry to enter into forward contracts, hoping for higher prices in the new season.

Tags: Ukraine, prices, USA