Grains - Grain Products

Corn: quarantine clauses

April 7, 2020 1:45 PM, Der AUDITOR
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PARIS. The US corn market is resisting the vehement price pressure from crude oil. However, US corn inventories are also expected to rise. In Western Europe, demand remained very stable, as confirmed by higher corn prices in France. In the Lower Rhine region, corn prices fell temporarily, which compound feed producers are likely to use for purchases, the trade said. Corn importers, too, are likely to supplement the contract terms with clauses on substitute delivery to ensure greater security of supply in the event of quarantines caused by the coronavirus.

The corn market in the USA was again unable to recover much this morning. US corn in Chicago was 0.4% weaker than yesterday at USD 3.29 per bushel. In Paris, corn rose 0.6% to EUR 166.50 per metric tonne in the morning, but then weakened again. Corn in the Black Sea region rose slightly. In the USA, the export inspection of 1,271,000 metric tonnes of US corn was higher than last week, which spoke in favour of a slightly firmer price trend. The development data for corn in the Crop Progress Report will not be available for several weeks. In view of the upcoming WASDE report, retailers expect US corn stocks to reach 2.004 billion bushel, compared to 1.892 billion bushel last month. World corn stocks are estimated by retailers as 298.50 metric tonnes compared to 297.34 metric tonnes in the March report. The ethanol market remained weak. According to the trade, the OPEC Plus Group could agree on Thursday to reduce global crude oil output by 10 to 15%. Far too little, the International Energy Agency (IEA) said in Paris. The drop in demand is so massive that all crude oil exporting countries would have to cut back on an unprecedented scale, which would also be uncontrollable.

Corn, daily price development

Parity

EUR/mt

Diff. EUR/mt

Bordeaux, FOB

162.00

1.00

La Pallice, FOB

162.00

1.00

Netherlands, CIF

182.00

-2.00

Oldenburg, DDP

190.00

0.00

Brake, FOT

182.00

-2.00

Lower Rhine Region, DDP

182.00

-4.00

Upper Rhine Region, FOB

180.00

-2.00

Ukraine, FOB

-

-

France firmer, Lower Rhine region weaker
In France, the corn market continued trading with slightly firmer prices on the spot market, while corn prices on the Rhine fell temporarily, which compound feed producers are likely to use for purchases. Yesterday, the trade still spoke of a slight decline in demand before Easter. But the uncertainty about the further course of the market remains high, so that demand is being met again and again. By 5 April, the EU had imported 16.05 million metric tonnes of grain maize compared to 18.91 million metric tonnes last year. Similar to the GASC in Egypt, corn importers are also likely to supplement the risks of logistical bottlenecks due to quarantines in the contract terms with clauses on substitute deliveries in order to achieve greater security of supply. It remains to be seen how Hungary's new quarantine measures will affect the availability of ship crews on the Danube, said traders from Bavaria. Ukraine exported almost 800,000 metric tonnes of corn last week. It remained unclear how the corn seeds will be sown on the Black Sea due to too dry soils in many places. Gaps in stocks can significantly reduce the yield.

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