W35: Maize (Corn) Update

In W35 in the maize (corn) landscape, Farm Futures expected the United States (US) corn sowing area to reach approximately 37.7 million hectares (ha) in the 2024/25 season, a decrease of 0.4 million ha compared to 2023/24. Experts attribute this reduction in hectarage to the persistent drought conditions experienced in the US in recent years. These droughts made corn cultivation less attractive than soybeans, as the success of the corn harvest is highly contingent on adequate soil moisture levels.

The United States Department of Agriculture (USDA) reports that US Corn Belt farmers navigated a turbulent Aug-23 characterized by extreme weather conditions. The region experienced a convergence of meteorological events, underscoring the climate volatility and its repercussions on agriculture. Across the Corn Belt, there was an abrupt onset of extreme heat, resulting in weekly average temperatures soaring 5 degrees Celsius (°C) to 7°C above the norm from the central Plains to the western part of the region. Temperature readings were consistently at least 2°C above normal across a broad area extending to the Gulf Coast, excluding southern Texas. These high temperatures, surpassing 40°C in some areas, coupled with minimal rainfall during W35, contributed to a 1% week-on-week (WoW) increase in the portion of corn fields classified as dry, rising to 43%. This situation represents a more severe scenario than observed during the 2022 harvest, when 27% of crops were in drought-affected areas.

Safras and Mercado report that the 2023 Brazilian off-season corn harvest progressed to 85.8% of the 15.54 million ha as of August 25. This is behind the 2022 progress level at 93.6% and the five-year average of 87.2%. Mato Grosso completed its harvest, while other states showed varying progress levels: Paraná at 55.7%, São Paulo at 54.2%, Mato Grosso do Sul at 79.6%, Goiás at 99.1%, and Minas Gerais at 46.8%. In the Matopiba region, the 2023 off-season harvest reached 90.5% of the 1.244 million ha. In Bahia and Tocantins, the harvest was already concluded. Maranhão reached 82.8% of its area, while Piauí stood at 84.3%.

Lastly, as the new corn harvest in southern Russia approaches, the export market maintained its relevance primarily for the Caspian direction, particularly with ongoing shipments to Iran in W35. Corn prices for SPT Astrakhan registered a decline in W35, reaching USD 164.19 per metric ton (mt), excluding value-added tax (VAT). Deep-sea ports have yet to see significant exporter activity, but the first signs are anticipated to emerge within the next one to two weeks. Globally, the market is currently characterized by a bearish trend, influenced by intense competition from the US and Brazil, alongside the corn harvest commencement in Europe, Ukraine, and Russia.