Miller Magazine Issue: 125 May 2020

106 MARKET ANALYSIS MILLER / MAY 2020 arantine measures affected the activity of the population. The demand for fuel increased slightly. The recovery in oil prices was somewhat supported by stock exchange quotes of corn in the United States, although prices in the physical market remain low due to lack of demand. Oil quotes of the first week of May grew amid data on stocks and the restoration of enterprises in some states, which should intensify the demand for fuel. Over the week, US oil reserves grew by 9 million barrels, distillates - by 5.1 million barrels, while gasoline reserves fell by 3.7 million barrels. May corn futures under pressure from data on a decrease in ethanol production and lower purchase prices in Asian markets, however, supported by rapid growth in oil prices at the end of the session, they recovered. In a week, ethanol production in the USA fell by 5% to 537 thousand barrels/day, which corresponds to the con- sumption of corn in volume of 1.43 million tons/week, whereas last year this figure averaged 2.8 million tons. The news of the purchase by a Taiwanese processor MFIG of a tender for another batch of Brazilian corn for shipping in August at a price of $ 171 / t C&F increased pressure on prices in the physical market. Prices for Brazilian corn fell to $ 152 / t FOB, for American - to $ 141.25 / t FOB US Gulf. In Ukraine, there is an imbalance in the price of corn. On the FOB basis, they are gradually decreasing for shipping in May-June, while exporters at the port keep them at a high level since traders need to close previously concluded cont- racts, and manufacturers hold back sales in anticipation of higher prices and amid high purchase prices from domestic processors Corn market globally fills pressure bearish factors: lower oil prices, increasing import duty on corn in the EU and the good pace of planting in the United States and Ukraine on the background of favorable rainfall. Warm weather with moderate rainfall in the Midwest allowed the sowing of corn to be intensified. As of May 3, it sowed 51% of the area compared with 39% on average over 5 years at this date. Until the end of the week, farmers will try to complete sowing, because then heavy rains will begin. Another decrease in corn prices in the United States led to an increase in import duties on corn, sorghum and rye in the EU, first to 5.27 € / t , and then to 10.4 € / t, since US prices are the basis for calculating import customs EU rates. This will slow down corn imports in the EU, which has now reached 17.471 million tons and is 14% lower than the corresponding indicator for 2018/19 MP. The increase in duties reduces the export competitiveness of Ukrainian corn, which puts pressure on its price. However, even in the absence of import duties and logistics costs, demand for Romanian corn in the EU is low, since Brazilian corn is pro- posed to be shipped in July-August at a much lower price. As of May 5, in Ukraine 3.96 million ha were sown with corn or 73% of the planned 5.39 million ha. Recent rainfall will have a positive effect on crops and improve prospects for a future crop. NOFI, a South Korean processor, purchased two cargoes of Brazilian corn this week for October shipping, confirming a gradual decline in grain prices for the new crop due to oversupply. I would like to believe that the market has already been ill or will soon recover.