Corn futures on the Chicago Stock Exchange continue speculative gains, which have been observed since the beginning of the week, despite fundamental factors: a bearish USDA forecast, lower export volumes and a decrease in ethanol processing. The main reason for the increase is insufficient rainfall in the northwest regions of the US corn belt, and hot weather forecasts for next week.
Over the past 5 days, there has been quite intense rainfall throughout the US corn belt, but in some states (Minnesota, Northern Iowa and Wisconsin), there is not enough rainfall to improve crop conditions.
Yesterday, July futures for corn rose 0.8% to $ 268.9 / t, while December futures jumped 3.3% to $ 219.7 / t, showing an overall increase of 7.3% over three days, but so far the 13% drop (from early July to 9th) was not compensated for due to increased planting areas and the forecast for the US crop.
EIA report data showed that US ethanol production for the week fell 2.5% to 1,040,000. Barrels per day, which equates to about 2.68 million tonnes of corn consumed per week.
Corn quotes were supported by the Rabobank forecast that corn exports from Brazil in 2020 / 21MY will fall to 21 million tons (12 million tons below their previous forecast) due to falling production and rising domestic prices well below the USDA July forecast of 28 million tons of corn.
Quotes for the Black Sea corn in Chicago also followed the American corn and November corn futures rose 7.3% to $ 248 / t in three days, although at the end of June they traded at $ 260 / t, and reached 290 in early May. $ / t.
On Wednesday, the Vietnamese government said it plans to remove the 3% duty on wheat imports and reduce the import duty on corn from 5% to 3% to support domestic feed producers, which will also support corn prices.
Riots and robberies in South Africa due to the imprisonment of former President Jacob Zuma forced the road, rail and port logistics to declare force majeure in the country, which could reduce the export supply of corn, the crop of which could reach about 17 million tons against 14.5 million tons last season …
Forward prices for Ukrainian corn after falling to levels of 210-215 $ / t this week returned to the levels of 220-230 $ / t with delivery in October-December, but farmers are in no hurry to conclude contracts for fear of a repeat of the heat in July- August.
