Warm and dry weather in the United States and Ukraine allows to speed up the harvesting of corn.
The U.S. over the past week caught up with the backlog in cleaning and threshed 63% of the area that corresponds to the average 5-year average. However, the rainfall next week may slow the rate of harvest.
In Ukraine, with 70% of the area harvested 22.5 million tons of corn with a yield of 7 t/ha, which gives hope for a crop in the range of 32 million tonnes.
Entering the markets of newly harvested corn puts pressure on prices. In Chicago, corn futures for the week fell by 1.9% to 143,3 $/ton amid falling stock market indices and oil prices and soy.
The Demand for corn in the US remains low because of the growth in the volume of proposals of South American corn, which, after reduction of soybean exports from Brazil began to enter the market.
For the week, corn exports from the U.S. fell by 36.2% to 653 thousand tons.
Growing demand for cheaper grain from Korean refiners who have purchased several shipments of South American corn at 198-200 $/T CFR.
Due to the low demand for maize prices in Ukraine remain at 160 $/t FOB. Romania that will gather a record harvest of maize at the level of 14-15 million tonnes, to compensate for the drop in production in Germany and France, so the chances to boost exports of domestic maize in the EU is very insignificant.
Because of the drought in the European part of Russia the crop of corn will decrease to 10 million tons, while exports will be reduced to 1.7-2 million tonnes against 5.5 million tonnes last year. This will reduce competitive pressure on the Ukrainian corn, as prices for grain in Russia remain at the level of $170/t FOB and is unlikely to fall through high domestic prices processors.
Reduction in the consumption of soybeans and meal, China thanks to new standards for animal feed will lead to increased consumption of maize. Rising demand for corn from China to stop the decline in corn prices in Ukraine, which are now dropped in the port to its lowest level in 12 months and make 147-148 $/t or 4800-4950 UAH/t