The release of the supply and demand report from the United States Department of Agriculture (USDA) highlighted what has been said for months: there is an ample supply of corn in the world. This scenario does not leave room for a reaction in prices on the Chicago Stock Exchange. As a result, cereal lots for December fell 1.68%, with a price of US$4.68 per bushel.
O The main adjustment took place in American supply, which has been growing since last month. Today, the agency increased its harvest estimate in the country by 1.13%, to 386.97 million tons, well above the 383.02 million that were projected by market analysts.
“The increase in estimates was a little higher than the order. If this number [386,97 milhões de toneladas] If indeed confirmed, it will be the largest corn production in US history, guaranteed by the increase in area, and which could have been even greater, if it weren’t for some weather problems throughout the cycle”highlights Daniele Siqueira, analyst at AgRural.
As a result of an indication of greater supply, cereal futures prices reached their lowest value since September 2021. But the expert says that now the behavior of contracts will depend on the demand for American corn and what will happen in the 2023/24 harvest from South America.
“The perception that Brazil’s 2024 off-season corn window could be hampered by problems with soybean planting is a factor that could support prices. On the other hand, if the weather continues to cooperate, Argentina could see a great recovery in this 2023/24 harvest, covering at least part of any reductions in Brazil”, recalls Daniele.
This Thursday, wheat recovered part of the gains of more than 4% in the last session on the Chicago stock exchange, following favorable estimates for production in some large cereal producers. Contracts expiring in December closed down 1.94%, at US$5.8075 per bushel.
Although the United States Department of Agriculture revised downwards its estimates for global wheat supply in 2023/24, the outlook for increased stocks grew 0.22% this month.
Furthermore, the department’s forecasts continue to indicate that Russia, the world’s main exporter, will continue to be a negative force for prices in Chicago. The agency increased its estimate for the Russian harvest by almost 6%, which is now forecast at 90 million tons.
Another piece of data with significant weight for the market was the increase in Ukraine’s export projections, which grew 9.1% compared to the previous month, to 12 million tons.
Ukrainians have been able to sell their agricultural goods even after the end of an agreement signed with Russia in July.
Since August 8, with the creation of a temporary export corridor in the Black Sea, the Ukraine exported 3.3 million tons of grainwhich were transported on 91 ships, according to the country’s Infrastructure Minister, Oleksandr Kubrakov.