Contrary to expectations, the USDA (United States Department of Agriculture) raised projections for corn production in the USA. After the release of the Supply and Demand report, some cereal futures contracts traded on the CBOT (Chicago Stock Exchange) fell by up to 25 cents.
“The drop in planted area was modest, and what was surprising was the increase in crop productivity”, points out ARC Mercosul Consultancy. “Along with the reduction in corn consumption in the USA, and the increase in production in Ukraine, American and global ending stocks grew, which put pressure on corn prices in Chicago. For Brazil, prices in the short term were pressured, but positive support from demand remains present. The USDA raised its Brazilian corn export projection to 37 million tons”, added ARC Mercosul.
FOR BRAZIL, IT HAS IMPROVED
According to T&F Consultoria, the USDA data for corn was good for Brazil: “The key point in the trend in corn prices in Brazil was exports […] The drop of 2.62 million tons in corn exports North American corn was offset by an increase of 2.0 MT from Ukraine”.
“Why were they good? Because Brazil's final corn stocks, projected by Conab, are more than 17 million tons and would need to fall to close to 10 MT for corn prices to rise significantly again, driven by exports. The upward adjustment in Brazilian exports reduces our final stocks by another 3 MT, which are very high”, concludes T&F analyst Luiz Pacheco.
Post: Marina Carvejani
Author: Leonardo Gottems
Source: agrolink
