....4. US corn exports to pick up pace as S American supplies dwindle
What’s happening? US corn exports to Japan and South Korea in 2019 fell significantly year on year on the back of increased competition from Brazil and Argentina. Japan and South Korea are the two largest buyers of US corn after Mexico. In 2019, US corn exports to Japan and South Korea were seen down 27% and 72%, respectively. Overall exports from the US also declined 40% in 2019 from 2018 levels. Both Brazil and Argentina exported corn at a record pace in 2019 following a bumper harvest and competitive prices. US corn exports particularly declined after June 2019 when Brazilian supplies started arriving in the market. A delay in the US harvest further slowed down its exports.
What’s next? Corn exports from the US are likely to pick up pace in 2020, as supplies from Brazil and Argentina are nearly tapped out. So far in January, the daily pace of Brazilian corn exports has slowed down sharply to 96,000 mt from 208,000 mt in December 2019. Corn prices in the South American countries have also firmed up recently, allowing US corn supplies to compete in the market.
5. Bearish outlook for EU gas as pipeline, LNG flows set to stay high
What’s happening? European gas prices for delivery this summer have tanked since the end of 2018, and are currently trading at Eur10.50/MWh at the Dutch TTF hub. Demand for storage injections this summer is likely to be weak given the expectation of a significant storage overhang at the end of this winter. S&P Global Platts Analytics is forecasting the TTF Q3 price could fall to close to Eur7/MWh.....MUCH MORE
What’s next? Last summer, Equinor deferred significant Norwegian gas production from its swing Troll and Oseberg fields due to low prices, but it may not be possible to defer additional volumes this summer even with the low prices. With Russia pumping high levels of gas to Europe under its “volume over value” strategy, the continuing glut of LNG, high stocks and Norway not curtailing as much as last year, the bearish outlook for the summer is set to continue....
HT: ZH
