USDA report dated June 13 has surprised traders, who were expecting crop areas of corn to drop; however, it has not been reconsidered, thus remaining at the point of 97.3 mln. acres. Predicted yield capacity has dropped only by 1.5 bushels per acre, to 156.5, whereas 150-155 bushels per acre had been expected.
Consequently, ending stocks of corn during the season of 2013/14 have slightly dropped from 2004 to 1949 mln. bushels. US production of corn is predicted to amount to 14005 mln. bushels, versus expected 13200-13800 mln. bushels. Many, however, suppose that information about smaller crop areas will be published later, on June 28, in acreage report, but for now it has cast considerable pressure on the market of new yield. World transit stocks during the season of 2013/14 have dropped from 154.63 to 151.83 mln. tons.
Bearish trend has been intensified by assessment of ending stocks of old yield, which has risen from 759 to 769 mln. bushels. However, lower prices for old yield of crop limit the rise of corn prices at US domestic market and drop of world production during the season of 2012/13. World transit stocks have dropped from 125.43 mln. tons to 124.31. Production in China has dropped from 208 to 205.6 mln. tons, in Argentina remained at the point of 26.5 mln. tons, in Brazil increased by 1 mln. tons to 77 mln. tons.
Additional support to July contract is provided by publication of data on ethanol production. It remains high and stable, thus amounting to 884 ths. barrels daily last week. Stocks have dropped from 16.41 mln. barrels last week to 15.99 mln. barrels.
New export sales remain low: 81.499 ths. tons of old yield and 67.961 – of the new one.
Sowing campaign in the USA is finished by 95%, whereas the average at this time is 98%. 85% of sowing has risen at the average point of 92%. 63% of sowing is in good and excellent condition, whereas last year’s result amounted to 66%.
According to seasonal trend, decline is to be expected during the nearest months.
Overview prepared by the Analytics Team of Commodity Trading Department of Masterforex-V Academy:
