Improving weather in Brazil lowers world corn prices, halting their growth in Ukraine

Amid reduced rainfall in Brazil, first crop corn has been harvested on 9% of the area and second crop corn has been sown on 2.2% of the planned area. The pace of work may accelerate this week, forcing traders to book profits after speculative gains.

March corn futures on the Chicago Board of Trade fell another 0.9% yesterday, to $189.8/t (-1.6% in two days, +6.4% in the month).

Recent rains in Argentina have eased the heat and somewhat improved the corn crop, and additional rainfall expected next week will reduce speculative demand. Another factor putting pressure on quotes was the reduction in export duties in Argentina, which will increase the supply of corn on the world market.

Export demand prices for Ukrainian corn this week reached $212-214/t or UAH 10,100-10,200/t with delivery to Black Sea ports, which has stimulated sales by farmers. However, a decline in quotations on world exchanges may lead to a drop in prices in Ukraine.

The market believes that due to the surplus of feed wheat on the Turkish market, local authorities may postpone the introduction of a quota for the import of 1 million tons of corn with a 5% duty, which will negatively affect the prices of Ukrainian corn.

US corn exports fell 19% to 1.247 million tonnes between January 17 and 24, but totaled 20.5 million tonnes for the season, up 31.4% from last year. But the USDA forecast for exports is 62.2 million tonnes, up 6.8% from the previous season. It is important to watch the relationship between the US and Mexico, the main importer of US corn.

Mexico agreed to accept flights carrying migrants from the United States after a show of imposing and lifting tariffs on Colombia. However, Mexican President Claudia Sheinbaum submitted to Congress on January 27 a draft constitutional reform aimed at protecting corn by banning the cultivation of GMO corn in the country. She explained that the changes to the Constitution would define corn as an “element of national identity” for Mexicans while also banning the cultivation of transgenic corn.

Recall that previously, disputes arose between the United States and Mexico over former President Andrés Manuel López Obrador's ban on the use of GMO corn for food. The United States demanded the cancellation of this decision because it violated the free trade agreement.