Market of corn awaits confirmation of record productivity in the United States

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     Porto Alegre, August 11, 2020 – This week, the United States Department of Agriculture (USDA) will update its supply and demand picture in light of the U.S. crop picture and natural demand adjustments. Basically, what is expected for this report is the confirmation of record productivity in the consensus of traders. Higher production would require a greater effort for corn exports, given that the current forecast is already for very high stocks next season.

     The current projection for the U.S. crop is 381 million tons with a productivity of 178.5 bushels/acre projected by USDA. There is some divergence in the update of these numbers. Some private companies point to lower levels of productivity, and others suggest much higher yield levels. In the consensus, 180.3 bushels per acre, a new record, which would put production at 384.8 million tons.

     The United States may improve the export numbers. U.S. corn is the cheapest in the global environment today, with FOB below USD 145/ton, against USD 153/154 in Ukraine, USD 157/158 in Argentina, and over USD 170 in Brazil. Even so, shipments by Brazil and Argentina remain strong, and weekly U.S. sales remain very weak. Part of this movement may refer to quality. The other determinant is the price in the interior of the United States, where local growers do not sell, and the export flow does not advance.

     Agência SAFRAS Latam

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