Global feed market: Corn prices are both ups and downs, and demand prospects are mixed

 

On Friday, the Chicago Board of Trade (CBOT) December 2021 corn futures closed at 553.
75 cents per bus, up 16.
75 cents or 3.
1% from a week ago
.
The spot price of Meiwan No.
2 yellow corn was 660.
5 cents per bus, up 26.
5 cents or 4.
2% from a week ago
.
The corn futures for delivery in November 2021 on the EURONEXT exchange closed at approximately 221.
25 euros/ton, an increase of 5.
25 euros or 2.
4% from a week ago
.
The FOB spot price of Argentine corn in Shanghe was US$234/ton, down US$4 or 1.
7% from a week ago
.
The Dalian Commodity Exchange's January 2022 corn futures will close at about 2,487 yuan/ton, down 35 yuan or 1.
4% from a week ago
.
On Friday, the US dollar index closed at 92.
68 points, down 0.
8% from a week ago
.

 

International crude oil futures rose by more than 10% this week, setting the biggest weekly gain in more than a year, mainly due to China’s successful control of the epidemic caused by the delta mutant virus, which significantly improved investors’ risk appetite; tropical storm Ida upgraded to four A hurricane is about to hit the U.
S.
Gulf of Mexico, causing local oil and gas companies to stop production in advance
.
On Friday, the October contract of West Texas Intermediate Crude Oil (WTI) on the New York Mercantile Exchange (NYMEX) was quoted at 68.
74 yuan per barrel, up 10.
3% from a week ago
.
The global benchmark October Brent crude oil futures closed at $72.
70 per barrel, up 11.
5% from a week ago
.

 

　　From the perspective of US corn crops, the excellent rate of US corn continued to decline last week
.
As of August 22, the good rate of corn in the United States fell to 60%, down 2% from a week ago and also lower than 64% in the same period last year
.
The current corn maturity rate is 4%, which is the same as the five-year average
.
In the past two weeks, the good rate of corn in the United States has fallen by 4%, which has helped to increase the risk of corn prices.
Because the current US and global corn supply is tight, the US corn yield needs to reach or exceed the trend line level to fill the supply gap and meet the increasing global demand.
Increasing demand
.
In its August supply and demand report, the U.
S.
Department of Agriculture estimated that the US corn production in 2021/22 would be 14.
75 billion bunks, which is a decrease of 415 million bunks from July, because the yield was reduced to 174.
6 bu/acre
.
However, a recent Midwest field study conducted by the American Professional Farmer Company showed that the yield of corn in the Midwest was higher than the USDA expected
.
In the past week, the northern Midwestern region of the United States rained, but some people believe that the rains came too late, and the help to the corn crop is limited
.

 

　　US corn demand is mixed
.
From the perspective of exports, in the week ending August 19, US 2020/21 net corn sales were 6,600 tons, a decrease of 97% from last week and a decrease of 95% from the four-week average
.
Net sales in 2021/22 were 684,000 tons, compared to 510,000 tons a week ago
.
The total US corn exports in 2020/21 so far reached 66.
17 million tons, an increase of 57.
0% over the same period last year, which is equivalent to 93.
9% of the US Department of Agriculture's annual export target of 70.
49 million tons
.
The corn market year will end this month, and there are still 4.
15 million tons of corn sales contracts for 2020/21 that have not yet been shipped
.

 

　　The U.
S.
Environmental Protection Agency on Thursday recommended to the White House to retroactively lower the mandatory blending requirements for U.
S.
biofuels in 2020, which is detrimental to U.
S.
corn demand
.
The annual output of corn in the United States reaches 15 billion cattails, one third of which is used to make ethanol
.

 

　　In South America, farmers have already started planting the first season of corn in the 2021/22 season
.
AgRural said that as of August 19, the planting progress of the first season corn in the central and southern Brazil of 2021/22 was 4.
1%, down from 5.
7% in the same period of the previous year
.
Although the planting season has begun, the weather factors have caused farmers to be cautious, because the new cold air front may bring frosts and affect the emergence of crops, just like the situation in Rio Grande do Sul last year
.
The harvest of the second season corn in 2020/21 was 79%, an increase of 9% from a week ago and 82% in the same period last year
.
This week, the Brazilian National Commodity Supply Company (CONAB) released the first 2021/22 production forecast report, showing that the corn sown area in Brazil will increase in the next year due to attractive prices and increased soybean sown area resulting in rotation of the second-season corn As the planting area increases, Brazil’s corn production will surge 33.
8% year-on-year to 116 million tons
.

 

　　However, La Niña may appear again this winter, which poses a potential threat to South American corn production
.
The National Oceanic and Atmospheric Administration (NOAA) predicts a 70% chance of La Niña from November 2021 to January 2022, which will also be the second consecutive year that La Niña will occur
.
Last winter, there was the strongest La Niña phenomenon in a decade, leading to dry weather in Argentina and southern Brazil, slowing down corn planting and declining production
.
Earlier this year, the yield of corn harvested in Argentina was below average, and the second season corn output in Brazil also fell sharply
.

 

　　The shortage of corn supply in Brazil is still serious, so large farmers in southern Brazil continue to import corn from Argentina and Paraguay to maintain their operations
.
Imported corn also helps stabilize domestic corn prices in Brazil
.
The consulting agency TF Agricultural Economic Consulting Company stated that in the interior of Brazil, the price of imported corn has stabilized at 95 reals per bag (approximately US$8.
50 per po)
.
Smaller end users cannot import corn and have to pay a higher price, about 100 reais per bag (8.
90 US dollars per po)
.
Brazil's first season of next year's corn will not be harvested until January
.