Strong cold front reaches US Midwest, but the market of corn ignores it

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As expected, the corn harvest is delayed in the Midwest. A season that started with a strong planting delay now also has a harvest delay. This should not be considered a new problem if the October weather behavior is normal. However, the weather in October shows the arrival of cold fronts with frost and snow in several locations, which tends to bring new variables to local potential production.

The US corn crop reached 30% last week. This index defines a delay already expected for this year due to late planting in May and June. The normal average would be 47% for the period. The delay may be alleviated due to the good harvest capacity of local farms. Preference has been given to soybeans due to greater risk of weather-induced losses, since soybeans already have half of their area reaped.

Despite this harvest weather picture, the market seems to ignore new risks of production losses. Prices remain stable, and with low volatility on the Chicago Board of Trade (CBOT). Still weighing on corn prices is the inexplicable estimate made by USDA for a cut in domestic demand in the feedstuff segment of around 8 million tons from the previous business year. Even with record pork sales to China and record housing of swine matrices, which must boost production, USDA signals a cut in domestic demand in the segment.

On the other hand, even with an estimated cut of almost 300 million head of pigs in China, the demand for corn in this country was not cut. It seems difficult that such a production cut in this segment does not bring cuts to corn demand in China, or that the expansion in pork production in the United States does not increase domestic demand for corn.