U.S. crop of corn arrival pressures CBOT prices


    Porto Alegre, September 28, 2020 – The U.S. harvest must intensify in the coming few days. The arrival of a crop of more than 370 million tons of corn together with the production of 115 million tons of soybeans brings natural seasonality to the prices of the commodity in this period. Therefore, the price corrections registered over the week on the CBOT reflect the rise of the dollar and the beginning of the U.S. harvest. The export demand and the sales profile on the part of U.S. growers will define the price trend in this second semester in the international market.

     Prices on the CBOT fell over the week. After reaching nearly USD 3.80/bushel, they returned to USD 3.65 in a natural and normal movement for this period of early harvest. Given the harvest concentration in the next thirty days, it would not be surprising if prices yielded to the support at USD 3.50 at the height of the U.S. harvest. The harvest is only 8% complete from the expected production of 378 million tons. In other words, there is still a long harvest ahead.

     The weather must be dry for the next two weeks, at least. This must favor the advance of the soybean harvest, as well as the corn planting. Soybeans are preferred at the harvest in October, so there must be a slower pace with corn. However, there are 378 million tons of corn and 115 million soybeans that reach the local and world markets in the next 30 to 45 days.

     This year of so many variables and distortions, the concentration of demand on U.S. production is beyond normal. For soybeans the movement is clear, since Brazil does not have more offers to meet the global demand at least until February, and Argentina has clear domestic trading difficulties due to government measures with the restriction to foreign currency in the country, amid others. European, Asian and mainly Chinese demand is only met by U.S. soybeans, which helps local exports and CBOT prices.

     Agência SAFRAS Latam

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