Site icon The Animal Nutrition, Updates on animal nutrition

Corn under trouble?

corn

Corn prices have taken a significant drop in the last days due to current global circumstances.

The Ukraine Russia conflict has only been a catalyst of a crisis that had already begun long before. Being this one what could be called a “commodity crisis.” As the price of raw materials for animal feed continue on the rise, while some are no longer available or are rapidly becoming restricted. The price of energy cannot escape this trend, and has on the actually become a major culprit. Driving fertilizer prices upwards, and generating an even greater increase in commodity prices. It does not seem that such trends could change any time soon, which poses a complicated scenario for food security, and sustainability worldwide. Raising significant concerns amongst producers, traders and other players involved.

 

Corn

U.S. corn crops are at 15% pollination, according to the USDA report, released earlier  last week. This number is slightly slower compared to the pollination rate for last year during the same period.

It is feared that the very high temperatures that the crops are going through could reduce the final productivity of this sewed corn due to the impact on this important stage.

On the Chicago Board of Trade (CBOT), corn prices recovered 1.06% from the 6.30% lost the previous day, sustained precisely by the problems of high temperatures. Export demand is slow, although domestic demand remains strong. China had made several U.S. purchases after Russia’s invasion of Ukraine, but that demand declined after a corn import agreement was reached between China and Brazil.

Meanwhile, Brazil’s second-rate corn harvest is 50% complete.

Soybean status

Regarding soybeans, last week ended with significant losses due to slowing export demand , and there was talk of more cancellations by China.  Those cancellations could be tied to the cost of U.S. soybeans compared to Brazilian supplies. Still, Brazil’s overall sales pace is slower than average. The price of soybean meal was markedly lower and that of oil was higher due to the aggressive reversal of recent product spreads.

The USDA report presented a tighter volume in total oilseed production as well as in final stocks for the United States. For South America, the projection set Brazilian and Argentine soybean production at 126 and 44 million tons, respectively.

What will happen next and how futures will develop remains somewhat of an incognita.  However, considering the evolution of oil prices, energy prices and the trend of inflation to stay on the  rise, expectations for a drop in commodity prices seem very slim at least for the time being.

 

 

Exit mobile version