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Global food market: weak demand, rising supply, US corn decline

 Last Update: 2021-12-02
 Source: Internet
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Foreign media news on November 21: In the week ending November 19, 2021, most of the global food market prices fell, failing to continue the strong momentum of last week, because of weak US corn export demand, South American corn production situation is improving, wheat The fall in prices brought pressure to compare prices, and international crude oil futures fell for the fourth consecutive week
.
However, high production costs may restrict the scale of corn planting in the United States next year and limit the decline in the feed market
.

On Friday, the Chicago Board of Trade (CBOT) December 2021 corn futures fell about 6.
5 cents or 1.
1% from a week ago to close at 570.
75 cents per bushel
.
The spot price of Meiwan No.
2 yellow corn was 627.
75 cents, down 7 cents or 1.
6% from a week ago
.
The March 2022 corn futures on the EURONEXT exchange closed at about 247.
50 euros/ton, up 3.
5 euros or 1.
4% from a week ago
.
The FOB spot price of Argentine corn in Shanghe was US$251/ton, up US$1 or 0.
4% from a week ago
.
The January corn futures settlement price on the Dalian Commodity Exchange closed at 2,694 yuan/ton, up 23 yuan or 0.
9% from a week ago
.

　　Energy market falls, dollar strengthens

　　This week, international crude oil futures fell for the fourth consecutive week, falling below the psychological support of $80, as Europe once again became the epicenter of the epidemic, and Austria became the first Western European country to resume a complete blockade.
This worries that the prospects for fuel demand will be damaged
.

　　With high inflationary pressures, major economies such as the United States are considering releasing strategic crude oil inventories, which also put pressure on oil prices
.

　　On Friday, the New York Mercantile Exchange (NYMEX) West Texas Intermediate Crude Oil (WTI) January contract closed at $75.
78 per barrel, down 4.
7% from a week ago
.
The global benchmark January Brent crude oil futures closed at $78.
80/barrel, down 4% from a week ago
.

　　On Friday, ICE's December US dollar exchange rate index closed at 96.
035 points, an increase of more than 1% over a week ago, setting a new high since July 16, 2020
.
The strong US retail data and the October consumer price index rose by 6.
2% year-on-year, the fastest increase in 31 years, which strengthened the market’s expectations that the Federal Reserve may accelerate interest rate hikes
.

　　Global corn production expectations are raised

　　The November report released by the International Grains Council (IGC) this week showed that due to the improvement in US corn yields, the forecast for global corn production in 2021/22 was raised by 2 million tons to 1.
212 billion tons
.
IGC estimates that global corn ending stocks will reach 287 million tons, which is also 2 million tons higher than last month and higher than the 278 million tons in 2020/21
.

　　IGC predicts that the United States will produce 382.
6 million tons of corn in 2021/22, which is higher than the 381.
5 million tons previously predicted
.
At present, the corn harvest in the United States has been 91% completed, which is 5% higher than the five-year average
.
The U.
S.
Department of Agriculture estimated last week that the US corn production in the 2021/22 season was 15.
062 billion bushels, which is 43 million bushels higher than last month's forecast, as the yield was raised by 0.
5 bushels/acre to a record 177 bushels/acre
.

　　While market supply has improved, the pace of US corn export sales has been weak
.
The US Department of Agriculture’s weekly export sales report shows that for the week ending November 11, the US’s 2021/22 net corn sales were 900,000 tons, a decrease of 15% from last week and a decrease of 19% from the four-week average
.
The total export sales so far this year is 33 million tons, down 6.
5% year-on-year
.

　　China’s corn imports fell month-on-month in October, while sorghum imports increased substantially.

　　According to Chinese customs data, China imported 1.
3 million tons of corn in October, an increase of 14.
2% year-on-year, but a month-on-month decrease of 61.
1%
.
The U.
S.
Department of Agriculture pointed out that although China's corn production has set a record high, the import procedures are cumbersome, and the price competitiveness and rising domestic transportation costs have prompted China to increase imports of barley and sorghum to meet the needs of the breeding industry
.
The U.
S.
Department of Agriculture predicts that China’s corn imports in 2021/22 will be 26 million tons, which is lower than the previous year’s record of 29.
5 million tons
.

　　According to customs data, China imported 830,000 tons of sorghum in October this year, an increase of 57.
2% year-on-year
.
From January to October this year, China's total imports of sorghum reached 8.
18 million tons, a year-on-year increase of 103.
3%
.
The import volume of barley in October was 1.
32 million tons, and the total import volume of barley in the first 10 months was 9.
94 million tons, an increase of 66% year-on-year
.
China has become the number one buyer of barley from the European Union and Ukraine, and more than half of the barley exported from Ukraine arrives in China
.

　　China bought up to 10 ships of Ukrainian corn last week

　　Traders said that Chinese buyers bought a large amount of Ukrainian fodder corn last week, the amount is estimated to be 300 to 700,000 tons
.
Ukrainian traders said that Chinese buyers bought 8 to 10 ships of corn, the quantity being at least 500,000 tons
.
The CNF price is 330 to 335 US dollars per ton, and the shipping schedule is from January to March 2022, but some traders claim that the CIF price is 325-330 US dollars
.

　　This week the Ministry of Agriculture and Rural Affairs of China announced plans to change seed regulations, which will pave the way for the commercialization of genetically modified corn.
This means that some recently approved genetically modified corn developed by Chinese companies will be ready to go on the market within a year
.
The Chinese government has expressed in recent months that it hopes to increase food self-sufficiency, but it has not yet allowed the cultivation of genetically modified soybeans or corn, and only allows it to be imported for animal feed
.

　　South American corn prices fall

　　The price of corn in Brazil has fallen in the past few days, because the prospects for the new season of corn production are clear, and farmers rush to sell their corn stocks before the soybean harvest
.
The Brazilian National Commodity Supply Company (CONAB) said that Brazil’s corn yield potential is good
.

　　The arrival of corn imported from Brazil has also put pressure on corn prices
.
From January to October, Brazil imported 2.
14 million tons of corn, compared with 1.
37 million tons in 2020
.

　　With the price of corn in Brazil falling, coupled with the depreciation of the real against the US dollar, helped boost interest in Brazilian corn exports
.
According to the Brazilian Association of Grain Exporters (ANEC), Brazil’s corn exports in November 2021 may reach 3.
08 million tons, higher than last week’s forecast of 2.
65 million tons.
This will be the first time this year’s monthly corn exports surpassed soybeans
.
In the first 11 months of this year, Brazil’s corn exports amounted to 17.
6 million tons, which is only about half of the 33.
4 million tons exported in 2020, due to drought and frost earlier this year that reduced corn production
.
The historical record of Brazilian corn exports exceeds 40 million tons
.

　　In Argentina, nearly 30% of corn planting has been completed, which is lower than the progress made in the same period last year
.
La Nina weather may cause dry weather in Argentina
.
But so far the weather has not posed a threat
.
The Buenos Aires Grain Exchange expects that Argentina’s corn production in 2021/22 will reach a record 55 million tons, up from 50.
5 million tons in the previous year
.

Price U.
S.
corn exports

　　Energy market falls, dollar strengthens

　　With high inflationary pressures, major economies such as the United States are considering releasing strategic crude oil inventories, which also put pressure on oil prices
.

　　Global corn production expectations are raised

　　China’s corn imports fell month-on-month in October, while sorghum imports increased substantially.

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