Global feed market: US weather worries, Brazilian corn production cuts, and feed prices rise

 

On Friday, the Chicago Board of Trade (CBOT) July 2021 corn futures rose approximately 26 cents from a week ago, to close at 682.
75 cents per cat.
Meiwan No.
2 yellow corn was quoted at 763.
75 cents per cat, up 15.
5 cents from a week ago.
The corn futures for delivery in November 2021 on the EURONEXT exchange closed at about 209.
50 euros/ton, an increase of 7.
5 euros from a week ago.
The spot price of Argentine corn in Shanghe was US$256/ton, up 9 US dollars from a week ago, FOB price.
The Dalian Commodity Exchange's September corn futures closed at 2,716 yuan/ton, an increase of 30 yuan from a week ago.

 

　　This week, the international crude oil futures market rose for the second consecutive week, hitting the highest point in two years, because OPEC will continue to implement the previous supply restriction plan.
The inventory data released on Thursday showed that US crude oil inventories fell more than expected last week.
The United States and Iran negotiated.
Progress has slowed down, which supports oil prices.
The New York Mercantile Exchange (NYMEX) West Texas Intermediate Crude Oil (WTI) July contract was quoted at $69.
62 per barrel, up 4.
98% from a week ago.
The global benchmark Brent August crude oil futures closed at $71.
89 per barrel, up 4.
61% from a week ago.

 

　　On Friday, the US dollar index closed at 90.
13 points, up 0.
1% from a week ago.

 

　　Recently, the weather in parts of the Midwestern United States is getting dry and the temperature is getting higher and higher.
This may still be the case in the next two weeks, making the market nervous and worrying that the growth of the newly sown corn crop will be adversely affected.
According to the USDA Drought Monitoring Weekly Report, as of May 25, approximately 24% of the corn-producing areas in the United States have experienced droughts of varying degrees.
Among them, Michigan has the most severe drought, and 99% of corn farms have droughts, of which 87% are moderate droughts.
, 12% is severe drought.
About 88% of the corn farmland in North Dakota is dry, 75% of the corn-producing area in South Dakota is in a dry state, and 45% of the corn farm in Ia is dry.
Taking into account the tense situation of corn stocks in the United States and the world, the market relies on the high yield of new season corn in the United States to meet demand and replenish stocks.
Therefore, the weather in the western corn planting belt is unfavorable, attracting speculative funds to speculate on weather risk premiums.

 

　　However, the crop progress report as of May 30 shows that the excellent rate of corn in the United States is still 76%, which is higher than 74% in the same period last year.
The corn planting progress in the United States is 95%, which is higher than 90% a week ago and 92% in the same period last year.
The five-year average over the same period was 87%; the emergence rate was 64%, last week 64%, last year 76%, and the historical average 70%.

 

　　In South America, Brazil's second-season corn production scale is still the focus of market attention.
The consulting agency Safras & Mercado recently estimated that Brazil’s corn production in 2020/21 will be 95.
2 million tons, which is lower than the April forecast of 104.
14 million tons, because the drought in May worsened the yield of the second-season corn crop.
The latest production forecast is 10.
85% lower than the previous year.
The second-season corn output is expected to be 61.
59 million tons, which is lower than the 70.
8 million tons predicted in April and 73.
47 million tons in the previous year.
Due to the dry weather, StoneX reduced the second-season corn output in Brazil to 62 million tons, which was 14.
7% lower than the earlier forecast and 17.
1% lower than the previous year.
AgRural forecasts Brazil’s second-season corn output at 60 million tons, which is 5 million tons lower than in May and 17 million tons lower than AgRural’s initial forecast.
Datagro predicts that Brazil's corn production in 2020/21 will be 101.
65 million tons, which is 3.
8 million tons lower than the previous forecast.
The second-season corn output is expected to be 77.
36 million tons, a 4% decrease from the previous year.
In Mato Grosso State, Brazil’s number one second-season corn-producing region, the Institute of Agricultural Economics (IMEA) predicts that Mato Grosso’s maize output in 2020/21 is expected to be 32 million tons, which is lower than the previous forecast of 34.
6 million tons.
The decrease of 9.
72% in 2019/20 was due to bad weather affecting the yield potential of corn.

 

　　The US Department of Agriculture's weekly export sales report shows that for the week ending May 27, 2021, US 2020/21 net corn sales were 531,100 tons, which was 5% lower than last week, but significantly higher than the four-week average.
So far this year, US corn export sales totaled 69.
11 million tons, an increase of 70.
8% year-on-year.
During the month of May, China placed an order for more than 10 million tons of US corn for 2021/22, but after June, the purchases of Chinese buyers disappeared.
No Chinese buyers were seen in the USDA's daily announcements.

 

　　The Food and Agriculture Organization of the United Nations (FAO) released a report predicting that world cereal production will reach a record 2.
821 billion tons in 2021, an increase of 1.
9% over 2020.
The main reason is that global corn production will increase by 3.
7% over the previous year.

 

　　The private organization IHS Markit estimated on Friday that U.
S.
corn production will be 360 ​​million tons in 2021, up from 345 million tons in the previous year.
The forecast value of Brazilian corn production in 2021 is lowered to 88 million tons, 5 million tons lower than the earlier forecast, lower than 103 million tons of the previous year; Brazil's corn output in 2022 is expected to be 119 million tons.
Argentina's corn production in 2021 is expected to be 47 million tons, 51 million tons in the previous year, and 53 million tons in 2022.

 

　　Next Thursday (June 10) the US Department of Agriculture will release the June supply and demand report.
Analysts expect the report to show that the US 2020/21 corn ending stocks will be 1.
203 billion bushes, higher than the 1.
257 billion bushes predicted last month.