Grains - Grain Products

Corn: Saudi Arabia puts heavy pressure on the crude oil market

March 30, 2020 2:18 PM, Der AUDITOR
Play report as audio

PARIS. The US corn market is under heavy pressure because Saudi Arabia has increased its crude oil production in order to take revenge on Russia for Moscow's failure to respond to the demand for a crude oil cutback. The US ethanol industry is in the red and US farmers are sitting on unsold corn. In the EU, a higher euro exchange rate improves the import chances for corn.

At midday, the corn markets in Chicago fell by 0.7% to USD 3.45 per bushel, while in Paris they rose by 0.5 % to EUR 169 per metric tonne. The US trade blames Saudi Arabia for the price misery of US corn as they wanted to punish Russia because Moscow did not want to agree to a production limitation with Riyadh. Crude oil prices continued to drop over the weekend. BRENT at USD 23.6 per barrel and WTI at USD 20.8 per barrel are testing new lows, traders said. Russia's Deputy Energy Minister Sorokin made it clear over the weekend that crude oil prices of USD 25 per barrel would be unpleasant but not a disaster for their own oil companies. The US ethanol industry and also US shale oil producers are in the red. The demand for ethanol could collapse to 50%, they said. On the catastrophic situation the US government would not have found solutions to help Big Corn. Also the forecast of Safras for 105.8 million metric tonnes of corn in Brazil, compared to 101 million metric tonnes from the USDA, drove prices down. Delivery problems in Argentina's port operations continue due to rising case numbers of Covid19-infected people. As Chinese processors expect supply bottlenecks from Brazil as well, Beijing is once again buying more US corn.

Corn, daily price development

Parity

EUR/mt

Diff. EUR/mt

Bordeaux, FOB

163.00

0.00

La Pallice, FOB

163.00

0.00

Netherlands, CIF

184.00

0.00

Oldenburg, DDP

190.00

0.00

Brake, FOT

184.00

0.00

Lower Rhine Region, DDP

186.00

0.00

Upper Rhine Region, FOB

182.00

0.00

Ukraine, FOB

-

-

Trade buys more EU corn 
The EU corn market was supported by the firmer price trend for wheat. Because lower corn imports from Argentina and Brazil are expected, Western European traders are also considering corn imports from the USA. EU corn imports fell by 13.2% to 15.41 million metric tonnes until 23 March. In the course of the season, Brussels imported 58.2% corn from the Ukraine, around 30.9% from Brazil, a good 5.9% from Serbia and 1.5% each from Moldova and Argentina. EU import requirements in 2019/2020 are estimated by the wholesale trade at 21 million metric tonnes. The euro exchange rate, which has risen to just under 1.11 USD/EUR, makes corn imports from overseas cheaper. Prices for Ukrainian grain maize rose to 177 USD/mt FOB Odessa.

View related articles

Go to the News Overview
Grain Products
Sep 21, 2022
GAZIANTEP. Exporters have successfully campaigned for the suspension of the export quota for bulgur in Turkey. They are also quite satisfied with the export performance in August.
Grains
Sep 21, 2022
BEIJING. The buckwheat harvest is underway and it is becoming clear that the extreme drought has also left its mark here. Prices have nevertheless dropped slightly.
Grains
Sep 20, 2022
BEIJING. Despite the arrival of the new crop, demand for millet in the Chinese market remains moderate due to Covid restrictions. Meanwhile, exports to Germany are at a similar level to last year.
Grains
Aug 31, 2022
BEIJING. New millet from Inner Mongolia should be available on the market from the beginning of September. Meanwhile, the price trend in recent weeks has been downward.