In W38 in the maize (corn) landscape, in its Sep-23 report, the Monitoring Agricultural Resources (MARS) expects the European Union (EU) corn yields to reach 7.26 metric tons (mt) per hectare (ha) in the 2023/24 season. This forecast represents a 3% year-on-year (YoY) decrease and is also 3% below the five-year average. Many countries are facing adverse weather conditions that are affecting the yield. The prolonged drought in Romania and Bulgaria is deteriorating the corn crop conditions. High temperatures are damaging corn crops in some parts of France and Italy. Additionally, Greece experienced severe floods resulting in the complete loss of corn crops in the Thessaly region, which typically contributes 22% to the national corn production.
The Secretariat of Foreign Trade (Secex) reports that Brazil’s unground corn exports totaled 4.22 million metric tons (mmt), valued at USD 989.32 million in the first 10 working days of Sep-23, accounting for 65.7% of the total shipments in Sep-22. The daily average of exports stood at 422.02 thousand mt, valued at USD 98.93 million per business day during the period, a significant increase of 38% in volume and a notable 14% surge in value compared to Sep-22. However, the price per ton declined by 16.8% YoY, dropping from USD 281.70/mt in Sep-22 to USD 234.40/mt so far in Sep-23. Nonetheless, projections suggest that Brazil is on track to ship a record 60 mmt of corn to the global markets in 2023, consolidating its position as the world's leading corn exporter.
The corn market in Mato Grosso do Sul, Brazil, progressed slowly in W38. The domestic corn market offered limited opportunities, primarily for buyers exempted from Tax on the Circulation of Goods and Services (ICMS). Corn prices stood at approximately USD 11.87/bag cost, insurance, and freight (CIF) factory in most areas, with Santa Catarina's port trading at USD 12.27/bag. However, a noticeable gap between sales intentions and indications was observed, with producers seeking prices ranging from USD 12.07/bag to USD 12.27/bag free-on-board (FOB) inland, while indications stood at USD 11.67/bag CIF factory.
Lastly, the corn export cost continuously declined in the Russian market in W38, although it aligned with the calculated parity level. This could be attributed to the relatively low corn supply volume, exerting minimal pressure on the market. Farmers focused on selling wheat and barley for export, which provided some support to domestic corn demand. The forthcoming price dynamics are contingent on the purchasing activities of Turkey and Iran, significant buyers of Russian corn. Projections suggest a decrease in imports from Turkey due to a robust domestic corn harvest, while Iran is expected to maintain its demand throughout the 2022/23 season. Nonetheless, the Russian corn market is susceptible to a potential further decline in the coming weeks as the supply for sale grows.