The seasonal decline in supply raises prices on corn

29.01.2019

A new report by experts of the IGC increased its forecast for global corn production in 2018/19 MG by 3 million t to 1076 million tonnes, 29 million tonnes will yield a crop 2017/18 MG.

In comparison with the previous report, the forecast of global trade in maize has increased by 1 million tonnes to 160 million tonnes, 8 million tonnes will exceed the level of last season.
 
Traders expect activization of purchases of maize by China, however, while lengthy negotiations have no real outcome, except for the purchase by China of 2 million tons of U.S. soybeans. For the week, the United States reduced corn exports by 20.8% to 893 thousand tons, up 11.7% compared to the previous year.
 
The slow pace of exports continue to put pressure on prices, so the March corn futures in Chicago remain at 149,3 $/t
 
The prices of physical markets rose slightly amid a seasonal reduction proposals in the United States and Ukraine, as well as logistical problems caused by the weather conditions.
 
In Ukraine, the price of demand for corn in the port increased up to 170 $/t, but this has not increased the number of proposals. Warming this week unblocks the road, and the approach of spring will force manufacturers to accelerate sales to raise working capital. The prices demand FOB do not exceed 184 $/t for deliveries in February, limiting further price increases.
 
For the week, the Ukraine reduced export of maize by 28% to 498 thousand tons, but in the whole season, exported more than 12 million tons with USDA's projected 28 million tons.
 
The Favorable conditions in South America may put pressure on the corn quotes when the markets will receive the grain from the new harvest from Argentina and Brazil.
 
As of January 25, in Brazil the second maize crop is sown 11,187 million hectares or 15.5% of plan vs 2% on this date last year. Early sowing and soybean harvesting allowed to intensify the corn and the promise of the precipitation will contribute to the development of crops.

In South Africa because of the drought, the acreage under maize will be reduced from 2.4 to 2 million hectares.


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