Contrary to expectations, the USDA (US Department of Agriculture) raised projections for corn production in the US.Following the release of the Supply and Demand report, some cereal futures contracts traded on the Chicago Stock Exchange fell by up to 25 cents.
“The fall in the planted area was timid, and what was surprising was the increase in crop productivity,” points out Consultoria ARC Mercosur. “Along with declining US corn consumption and rising production in Ukraine, US and global end stocks increased, which put pressure on corn prices in Chicago. For Brazil, short-term prices were under pressure, but positive support from demand remains present. The USDA has raised its projection for Brazilian corn exports to 37 million tons, ”added ARC Mercosur.
FOR BRAZIL, IMPROVED
According to T&F Consultoria, USDA data for corn was good for Brazil: “The key point in the trend of corn prices in Brazil was exportation. US corn exports were offset by Ukraine's 2.0 MT increase. ”
“Why were they good? Because Brazil's final stocks of maize, projected by Conab, are over 17 million tons and would need to fall to around 10 MT for maize prices to rise significantly, driven by export. The upward adjustment in Brazilian exports reduces our final stocks by 3 MT, which is very high, ”concludes T&F analyst Luiz Pacheco.
Post: Marina Carvejani
Author: Leonardo Gottems