Global feed market:high prices restrict demand, corn prices fall
By: Date: 2021-03-09 Categories: Internationalfood Tags: ,
Foreign media news on March 7:In the week ending March 5, 2021, most of the global food market prices have fallen because of the significant slowdown in U.S. corn export sales, the continued strength of the U.S. dollar exchange rate, and the outbreak of a new African swine fever epidemic in China. Feed demand is worrying, and the US corn sown area is expected to increase substantially this spring. However, the second season corn planting in South America continued to be delayed, and international crude oil futures rose strongly, providing some potential support for corn prices.

   On Friday, the Chicago Board of Trade (CBOT) May 2021 corn futures fell about 2 cents from a week ago to close at 545.50 cents per bushel. Meiwan No. 2 yellow corn was quoted at 625.25 cents per cat, down 5.75 cents from a week ago. The corn futures for delivery in June 2021 on the EURONEXT exchange closed at approximately 221.25 euros/ton, an increase of 1.25 euros from a week ago. The spot price of Argentine corn in Shanghe was 232 US dollars/ton, down 12 US dollars from a week ago, FOB price. The Dalian Commodity Exchange’s May corn futures closed at 2,790 yuan/ton, an increase of 10 yuan from a week ago.
   International crude oil futures rose sharply this week, hitting the highest level since 2019, because OPEC unexpectedly stated that it will postpone the current production cut to the end of April, and Saudi Arabia will also extend its 1 million barrels of production cut measures to the end of April. The most active April West Texas Intermediate Crude Oil (WTI) on the New York Mercantile Exchange (NYMEX) on Friday closed at US$66.09/ton, up 7.5%from a week ago, and Brent’s May crude oil futures closed at US$59.36/ton. Barrel, up 7.7%from a week ago, this is also the seventh consecutive week of rising.
   On Friday, the US dollar index closed at 91.99 points, up 1.2%from a week ago. A rise in the US dollar will weaken the competitiveness of US agricultural exports, thereby putting negative pressure on prices.
   2021 spring broadcast competition is still fierce
   Due to tight supply and strong demand, corn prices have continued to rise recently, prompting the USDA to set the insurance premium for corn planting in 2021 at US$4.58 per bushel and soybeans at US$11.87 per bushel, both of which are the highest levels since 2013. . Corn insurance premiums were 18%higher than the same period last year, and soybeans were 29%higher. Analysts pointed out that rising corn insurance premiums will prompt farmers to increase corn planting areas. At the Annual Agricultural Outlook Forum, the U.S. Department of Agriculture predicted that the corn planted area in the United States will reach 92 million acres this year, an increase of 1.2 million acres over the previous year. U.S. corn production in 2021 will reach 15.15 billion cats, higher than the 14.182 billion cats in 2020.
  China corn imports
   The Chinese government announced that it will rebuild the pig stock. In 2021, China’s GDP is expected to grow by nearly 6%, which may help boost feed demand. The Chinese government announced on March 5 that it will expand the corn planting area in 2021.
   The US Department of Agriculture’s weekly export sales report shows that for the week ending February 25, US corn sales for 2020/21 were 115,900 tons, a new annual low, 74%lower than last week and lower than the four-week average Up to 96%. So far this year, the total US corn export sales have reached 59.12 million tons, an increase of 121.9%year-on-year.
   It should be pointed out that as of the week of February 25, China bought 1.0547 million tons of US corn, but sales to unknown destinations cancelled 1.764 million tons. Some people worry that although China has contracted to purchase a large amount of US corn, the actual import pace may be slow. However, more people believe that China will import US corn that has been ordered. China’s corn imports in 2020/21 may reach 30 million tons of corn, which is higher than the current US Department of Agriculture’s forecast of 24 million tons.
  Unfavorable weather in South America, production is threatened
   This week Argentina lowered the rating of the corn crop again. The current Argentine crop has entered a critical yield formation period, but the weather forecast shows that there is not much rainfall and the temperature is higher than normal.
   The Buenos Aires Grain Exchange said that if the rains in the next few weeks are disappointing, it may lower its corn production forecast. The exchange currently estimates that Argentina’s corn production is 46 million tons.
  In Brazil, rainy weather continues to delay soybean harvest and second-season corn planting. At present, the ideal planting window for second-season corn in many areas has ended, and the corn crops planted afterwards will face the threat of severe weather.
  StoneX, a consulting agency, predicted this week that Brazil’s corn production in 2020/21 will be 108.5 million tons, which is lower than the previous forecast of 110.2 million tons due to delays in planting the second season of corn. According to data from the consulting agency AgRural, as of late last week, 39%of the second-season corn planting was completed, compared with 67%in the same period last year. The delay in planting the second season of maize in Brazil means that it may not be available for export until July to August.
   Next week, the USDA may slightly lower global corn ending stocks
  Tuesday (March 9) USDA will release its March supply and demand monthly report. Analysts predict that this report may show that global corn ending stocks for 2020/21 will be 11.19 billion bushels, slightly lower than last month’s forecast.
   The USDA may not substantially adjust the forecast for South American production. Market analysts predict that the U.S. Department of Agriculture may lower its forecast for corn production in Argentina. The current forecast is 47.5 million tons.