Miller Magazine Issue 137 May 2021

102 MARKET ANALYSIS MILLER / may 2021 from the coronavirus crisis, but it’s not for sure. Goldman Sachs predicts commodity rally will be increased by an- other 13.5% within a year. GRAINS MARKET The grain market continues its inertial movement in an upward trend. Insignificant precipitation in the East of the USA and in Brazil did not reduce the degree of bulls' mood, but as the release date of the May WASDE report approaches, the behavior of players on the stock exchange becomes more cautious. Some market par- ticipants have pointed to a record long position in corn futures on the Chicago Exchange as a factor that could push prices down at some point in the nearest future. According to SP Global Platts, the risk of African swine flu outbreaks in China cannot be ruled out, as many be- lieve China may be underreporting these statistics. Any outbreak could potentially curtail the growth of grain pur- chases in the country. Corn remains the market driver. CORN Planting rates in Europe and the Black Sea region are lagging behind the average, the US has accelerated significantly and is now ahead of the five-year average, and the drought in Brazil remains a key factor in support- ing prices. In the domestic market of China, the United States and Brazil, corn prices remain at record highs due to demand from the livestock sector as well. Light rainfall in Parana, one of Brazil's main safrinha growing states, does not reverse the effects of the in- creasing drought. The market expects the USDA to cut its forecast for corn production from 109MMT to 100MMT in May, but some analysts believe that production in Bra- zil could reach 92-97MMT. Major livestock producers in southern Brazil are already importing corn from neighboring Argentina and Paraguay to keep their factories run- ning, and they are asking the govern- ment to take a more active role in in- creasing grain production. According to market participants, in the near fu- ture, the import demand in Brazil may reach 3MMT. With very limited corn supplies and record high domes- tic corn prices, Brazil's Agriculture Minister announced last week some financial incentives for farmers to in- crease the production of corn and