Traders expect a neutral USDA Corn report

Ahead of the December USDA report, traders are holding neutral positions on corn, so prices remain stable, or slightly lower. However, in the United States, prices were kept from falling by an increase in ethanol production and export sales to Mexico.

According to the average forecast of analysts, in the new report, USDA experts will slightly reduce the estimate of corn stocks in the United States, but the forecast of final World stocks will remain at 304.5 million tons. for Argentina, the production forecast will be reduced by 300 thousand tons to 54.2 million tons, and for Brazil it will be increased by 400 thousand tons to 118.4 million tons.

According to official data from China, in 2021 the country harvested 272.6 million tons of corn, which is 4.6% higher than last year and corresponds to the USDA forecast of 273 million tons. compared to the previous year, the sowing area increased by 5% to 43.32 million hectares, but the yield decreased by 0.4% due to flooding in the Huang Huai Hai River area.

December futures for American corn in Chicago have remained at 2 230/ton since the beginning of the week, and even data on increased sales to Mexico and ethanol production could not push them up.

Yesterday, the USDA announced the sale of 1.844 million tons of corn to Mexico, of which 1.09 million tons were delivered in 2021/22 mg and 754 thousand tons in 2022/23 MG.

According to the EIA Association, during the week, ethanol production in the United States increased by 55 thousand barrels/day to 1.09 million barrels/day, which is the highest level since October 29. At the same time, ethanol reserves increased by 163 thousand barrels to 20.464 million barrels.

Low demand for corn from China puts pressure on the prices of American corn, which is the main competitor of Ukrainian corn in the Chinese market.

In addition, the market is under pressure from active sales of corn from Brazil, which, despite a sharp reduction in production in November, increased corn exports by 54% compared to October to 2.89 million tons, which is still inferior to 4.94 million tons in November 2020.

Graintrade

Tags: corn, Brazil, Mexico, USDA Report, USA