1. Weekly News

Global

IGC Raises Global Corn Production Forecast for 2024/25, Boosted by Brazil's Outlook

The International Grains Council (IGC) has increased its forecast for global corn production in the 2024/25 season, primarily due to an improved outlook for Brazil's crop. The updated forecast anticipates a global corn harvest of 1.223 billion metric tons (mt), up by 3 million metric tons (mmt) from the previous estimate, though slightly below the 1.226 billion mt recorded in the 2023/24 season. The revised forecast includes Brazil's corn production, which rose to 124.6 mmt from the previous 121.5 mmt. The IGC has maintained its projection for the United States (US) corn crop at 374 mmt.

Europe

Heatwave in Europe Threatens Southeast Spring Crops, Benefiting Western Farmers

A heatwave set to sweep across Europe in W26 could cause significant damage to spring crops in the southeast. A week of high temperatures would reduce production, while two weeks could cause damage. The European Union (EU)’s crop monitoring agency, Monitoring Agricultural ResourceS (MARS), has lowered its yield estimates for Romania's maize and sunflower crops below the five-year average due to prolonged dry weather, making them highly vulnerable to the upcoming heatwave. Conversely, the warm and dry weather is welcome in the western EU, where crops have suffered from excessive rainfall since autumn. In particular, French farmers are anticipated to benefit from the weather, which is expected to improve their harvest prospects.

Brazil

Brazilian Corn Exports to Reach 1.06 MMT in Jun-24

The National Association of Cereal Exporters (ANEC) revised its Jun-24 projections for Brazilian corn exports, indicating high volumes despite some recent adjustments. Corn exports are projected at 1.06 mmt, slightly below Jun-23 but higher than the previous week's estimate.

Brazil's Center-South Corn Harvest Reaches 34% as of W26

Brazil's center-south region farmers harvested 34% of their second corn crop for the 2024 cycle, the fastest pace in over a decade. This represents a 13% increase week-on-week (WoW) and is significantly higher than the 9% reported a year ago, driven primarily by the states of Mato Grosso and Paraná. Brazil's second corn crop, which accounts for about 75% of the national output annually, is expected to reach 88.12 mmt this season.

South Africa

South Africa Faces Decline in 2024/25 Season’s Corn Production Due to El Niño

The South African Agricultural Chamber of Commerce projected a 19% year-on-year (YoY) decline in South Africa's corn production for the 2024/25 season due to the impact of El Niño weather conditions. The expected production is 13.3 mmt, with corn exports anticipated to drop by 58% YoY to 1.44 mmt. This export figure includes 840 thousand mt of white corn and 600 thousand mt of yellow corn. Reduced harvests will decrease exports to countries such as Zimbabwe and Zambia. Since May-24, South Africa has already exported 256 thousand mt of white and yellow corn, with nearly half going to Zimbabwe and the remainder distributed to Zambia, Namibia, Botswana, Lesotho, and Mozambique.

Ukraine

Ukrainian Corn Exports Hit 2.2 MMT Amidst Competitive Global Market

Ukrainian corn exports reached 2.2 mmt as of June 22, reflecting high market activity. Jun-24 is projected to be the most productive export month, with a potential decline in Jul-24 and Aug-24 as the market transitions to the new harvest. The global market poses challenges for Ukrainian corn due to competitive pricing. In Italy, Argentine corn is priced similarly to Ukrainian corn, while in Spain, Argentine corn is slightly cheaper, making it more appealing to buyers. Consequently, Ukrainian traders are hesitant to sell their limited stocks. The corn market is entering the off-season, and prices are expected to stabilize in the coming weeks.

2. Weekly Pricing

Weekly Maize Pricing Important Exporters (USD/kg)

Yearly Change in Maize Pricing Important Exporters (W26 2023 to W26 2024)

US

In W26, the wholesale maize prices in the US fell by 11.11% WoW to USD 0.16 per kilogram (kg). This decline continued from W23, when prices were USD 0.19/kg, reflecting a 15.79% month-on-month (MoM) drop. The price decrease is due to the forecast of the United States Department of Agriculture (USDA), indicating a potential increase in planted area for soybeans, corn, and wheat compared to earlier estimates in Mar-24. The expected corn planting area is projected to range between 36.46 to 36.95 million hectares (ha), with an average expectation of 36.57 million ha, up from the USDA's Mar-24 estimate of 36.02 million ha.

Brazil

The wholesale price of Brazilian maize dropped by 5.85% WoW to USD 0.17/kg, reversing the previous week's price increase. This decline is due to the accelerating corn harvest, as reported by Brazil's National Supply Company (CONAB). Amid dry and hot weather, the second corn crop has been harvested in 49% of the area (compared to 33% last year), a record for the entire period of observations. While corn yields in Mato Grosso and Goiás are good, they are below average in other states due to the prolonged lack of rainfall.

Argentina

In W26, the wholesale price of Argentine maize rose by 5.56% WoW to USD 0.19/kg from USD 0.18/kg. This increase is due to damage caused by leafhoppers, which led to significant losses in Argentina's corn production during the 2023/24 season. The Argentine government noted that the discovery of leafhoppers would aid future pest control efforts. Due to the insect population surge, the Rosario Stock Exchange lowered its estimate for Argentina's corn production in 2023/24 by 20% to 47.5 mmt.

Ukraine

In W26, the wholesale price of Ukrainian maize dropped 5.88% WoW to USD 0.16/kg from USD 0.17/kg. This decline is attributed to record Ukraine's corn exports in Jun-24, which reached 2.2 mmt, indicating high market activity. However, figures may decline significantly in July-August as the market switches to the new harvest. Additionally, the global situation has been unfavorable for Ukrainian corn. While it remains in demand in the Italian market, its competitiveness is declining due to the pricing policy.

Romania

Maize prices in Romania held steady at USD 0.20/kg in W26, showing no change from the previous week. Despite this stability, the market anticipates future price increases as a heatwave across Europe threatens significant damage to spring crops in the southeast. Analyst warns that even one week of hot weather could reduce production, with two weeks potentially causing severe damage. Due to prolonged dry weather, the EU's crop monitoring agency, MARS, has already lowered yield estimates for Romania's corn and sunflower crops.

3. Actionable Recommendations

Optimize Production Strategies

To optimize production strategies, countries like the US can benefit from advancing precision agriculture technologies and adopting sustainable farming practices. This approach would help maximize yields and mitigate risks associated with climate variability. Similarly, Brazil could focus on improving irrigation and fertilization practices, particularly in top corn-producing regions such as Mato Grosso and Paraná. These efforts would support the projected increase in Brazil's corn production, contributing to global supply stability and competitiveness.

Enhance Resilience to Climate Risks

Enhancing climate risk resilience is crucial for countries like South Africa and Romania within the EU. South Africa should prioritize implementing climate-smart agricultural practices to mitigate the adverse effects of El Niño and other weather patterns on corn production. In contrast, Romania could invest in drought-resistant crop varieties and adaptive farming techniques to withstand heat waves and prolonged dry spells, which threaten corn yields in the southeastern region of the EU.

Improve Supply Chain Efficiency

Improving supply chain efficiency is essential for countries like Argentina and Ukraine to optimize corn distribution. Argentina could enhance its logistical infrastructure, including storage facilities and transportation networks, to facilitate smoother domestic and international corn trade. Simultaneously, Ukraine should streamline regulatory processes and trade documentation to reduce barriers and enhance market access for its corn exports, ensuring timely deliveries and competitive pricing in global markets.

Sources: Portal Do Agronegocio, Hellenic Shipping News, AgroPortal, Oilworld, NoticiasAgricolas