Corn prices in the international market have settled down. Despite the ongoing harvest in the United States, prices fail to plummet. Attention is focused on two key indicators: the still inexplicable demand cut in the feedstuff segment projected by USDA for 2020 and the final crop numbers in January.
The USDA’s estimate for 2019/20 feedstuff demand has not been well accepted by the market on the Chicago Board of Trade. Despite the great flow of exports in the US meat sector, record pork exports to China, record US swine herds, and expanding chicken industry in 2020, USDA maintains its projected cut of nearly 9 million tons in the domestic corn demand in the feedstuff segment. Cheap wheat might justify this curve, but wheat is far more expensive than corn and is operating above USD 5.00/bushel, against USD 3.80 of corn.
The other explanation could indicate there was more corn planted for silage and therefore a larger portion of domestic consumption would be met with silage rather than with corn grain. However, USDA has used a portion of silage land that is virtually the same every year. There is no news in this environment.