Favorable weather and completion of corn planting in South America accelerates export sales and increases pressure on world prices

The abundant rainfall of the rainy season in Brazil is favoring the sowing and development of soybean and corn crops. According to the Conab agency, despite the delay in sowing in September due to the lack of rainfall, the condition of the crops is better than in previous seasons. In the main agricultural states of Mato Grosso, Mato Grosso do Sul, Paraná and Goiás, the vegetation index exceeded the maximum indicators of previous years. Corn is developing in favorable conditions almost throughout the country, and soybean crops have recovered after the delay in sowing thanks to the rainfall. Only in some areas of the northeast were weather conditions unfavorable.

According to Conab, as of December 22, 78% of the area in Brazil was sown with corn (75.5% last year), and 98% with soybeans, which will facilitate the sowing of a second crop of corn.

Between December 1 and 23, the country exported 3.32 million tons of corn and 1.35 million tons of soybeans. According to the forecast of the Anec agency, in December, corn exports will decrease compared to November from 4.89 to 4.09 million tons, which will almost double the figure of December 2023 (2.36 million tons). And soybean exports will reach 1.62 million tons.

According to the Buenos Aires Grain Exchange, 65.8% of the area in Argentina is sown with corn (55.6% last year), and 76.6% with soybeans (64.7%). The forecast for the area sown with corn is left at 6.3 million hectares, and for soybeans it is increased from 17.9 to 18 million tons compared to 16.6 million hectares in the 2023/24 MY. Thanks to sufficient rainfall, sowing in the country is still ongoing, and only in some areas there is a moisture deficit.

December corn futures on the Chicago Board of Trade rose by 2.5% to $176.4/t during the week (+4.7% per month, -16% per year) against the backdrop of active exports from the US and increased ethanol production.

In the 2024/25 MY (as of December 19), the US exported 14.4 million tons of corn, which is 26.8% ahead of last year's pace.

Increased corn supply on the EU market is putting pressure on prices. March corn futures on the Paris exchange fell 0.9% to €205.5/t or $213.7/t over the week (-1.9% month-on-month, -3.6% year-on-year).

Against the backdrop of declining prices for European corn, Ukrainian farmers should accelerate the sale of their own products while prices for it are at a high level.

During the week in Ukraine, export demand prices for corn in Black Sea ports increased by $2-3/t to $204-206/t or UAH 9,650-9,750/t, but farmers are holding back sales in anticipation of further price increases, although last year they were 30% lower and amounted to $157-165/t.