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Corn: Coceral expects high earnings in France

June 9, 2020 2:36 PM, Der AUDITOR
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PARIS. Corn tended to be slightly weaker in Chicago and Paris andalso gave way on the Black Sea. In the USA, a good crop rating for corn caused some price pressure in Chicago, and export controls for US corn were in line with trade expectations. It remains to be seen whether tropical storm "Cristobal" in the USA will change the situation. Coceral expects a 2.9% higher crop in the EU. France is expected to harvest 2.6 million metric tonnes more corn. The Ukrainian trade is rowing back in terms of prices.

In Chicago, US corn was trading at USD 3.32 per bushel at noon yesterday, down 0.3%. In Paris, the front-end price was 0.1% higher at EUR 169.50 per metric tonne. In the USA the tropical storm "Cristobal" also surprised the corn market. Heavy storms coming from the US Gulf caused heavy rains with flooding in the US states of Mississippi, Louisiana and Alabama, which brought shipping traffic on the Mississippi delta to a standstill. The rains are expected to continue north and could affect US corn areas. The US corn sowing season was 97% complete. The export inspection for US corn was in line with trade expectations at mt 1.1 million. In the 2019/2020 season, exports totalled 1.16 billion bushels, 26% below last year's figure at the same time. Pressure came from the crude oil market. Saudi Arabia announced that voluntary production cuts would no longer be continued from July onwards, resulting in a significant drop in oil prices. The United Arab Emirates will do the same to Saudi-Arabia, so that additional cuts of just under 1.2 million barrels per day will expire and have to be made on the supply side. In the morning, WTI crude oil fell by 4.3% to USD 38.3 per barrel and Brent by 5.2% to USD 40.8 per barrel.

Coceral expects 2.9 % higher EU corn crop
In France, corn fell by EUR 1.00 per metric tonne on the spot market. The European grain trade association Coceral increased the EU corn crop from 65.5 million metric tonnes in May to 66.8 million metric tonnes, compared to 64.9 million metric tonnes last year, due to a 2.6 million metric tonnes higher expected corn crop in France. France's crop is expected to increase from 12.8 million metric tonnes last year to 15.4 million metric tonnes. For Germany, the association expects an increase from 3.1 to 4.6 million metric tonnes. This should result in a significant reduction in the need to import corn into the EU, especially Spain, Italy and the Netherlands. This, together with an increase in the EU feed barley crop from 62.1 to 63.4 million metric tonnes, led us to expect more pressure on the feed sector. The difficult weather conditions for sowing the winter cereal led to an increase in the corn acreage. This amounts to 9.2 million hectares after 8.6 million hectares last year. The slaughter cattle sector provided stable impulses; while the pork price remained almost unchanged at EUR 1.72 per kg SG, the industry expects a good barbecue season, even if more precipitation could slow down barbecue activity somewhat. Ukrainian corn is to be offered for the new crop at 128.40 EUR/mt FOB Odessa.

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