1. Weekly News

Argentina

Argentina's Corn Production Forecast Downgraded Due to Pest Damage

Argentina's corn production estimate for the 2023/24 season has been reduced to 46.5 million metric tons (mmt) from the previous estimate of 49.5 mmt. This downward adjustment is due to damage caused by the leafhopper, an insect vector of diseases, coupled with adverse weather conditions experienced two months ago. The Buenos Aires Grain Exchange (BdeC) reported that the unharvested area of corn in regions affected by the leafhopper and heat stress is estimated to be around 17%. Consequently, Argentina's corn production for this season is projected to be the lowest in the last seven years, excluding seasons affected by major droughts in 2017/18 and 2022/23.

Brazil

Brazil's Corn Production Forecast Upgraded for 2023/24 Season

Brazil's corn production estimate for the 2023/24 season has been revised upwards, with better results reported from late harvests of the oilseed and an increase in the cereal's off-season production. The country's total corn production for the 2023/2024 season is now estimated at 115.85 mmt, up from the previous estimate of 114.9 mmt. Moreover, the production potential of the second harvest was adjusted from 90.88 mmt to 91.86 mmt, although it remains 15.4% below the previous season's output.

France

France Faces Delays in Corn Sowing and Declines in Winter Crop Conditions

Corn sowing in France was completed on only 45% of the planned area as of April 29, significantly lower than the same date last year (54%) and the average over the past five years (70%). Additionally, the condition of winter crops in France is worse than usual, with the share of winter soft wheat, winter durum wheat, and winter barley crops in good and excellent condition not exceeding 63%, 66%, and 66%, respectively. These figures represent declines from the previous year's conditions.

Paraguay

USDA Forecasts Recovery in Paraguay's Corn Production for 2024/25 Season

Despite the challenges faced by Paraguay's zafriña corn crops this season, with estimated production between 3.8 and 4.2 mmt, lower than the previous season, the United States Department of Agriculture (USDA) forecasts a recovery in the area for the 2024/25 season. The USDA projects corn production for the 2024/2025 campaign to reach 5.2 mmt, with an increased area of 900 thousand hectares (ha). While planting for the 2024/2025 campaign is still months away, farmers and input distributors anticipate a marginal expansion in crop area. Export projections for 2024/25 indicate shipments of 3.3 mmt, one of the highest volumes recorded.

Ukraine

Ukraine's Corn Exports Dip in 2023/24

In the 2023/2024 marketing year (MY), Ukraine witnessed a slight decrease in agricultural exports, with grain and leguminous crop exports totaling 41.06 mmt, down by 299 thousand metric tons (mt) compared to the previous year, as reported by the Ministry of Agrarian Policy and Food of Ukraine. Specifically, corn exports experienced a notable decrease, declining by 1.06 times to reach 23.074 mmt.

2. Weekly Pricing

Weekly Maize Pricing Important Exporters (USD/kg)

Yearly Change in Maize Pricing Important Exporters (W18 2023 to W18 2024)

United States

Maize prices in the US experienced a slight increase of 5.56% WoW at USD 0.19/kg, driven by trader positioning ahead of key United States Department of Agriculture (USDA) reports. Furthermore, improved weather forecasts for wheat-growing regions in the US further contributed to the trend.

Brazil

Throughout Apr-24, maize prices in Brazil experienced a decline, attributed to factors such as exchange rate fluctuations and challenging weather conditions. Increased rainfall in maize-producing regions alleviated drought concerns, leading to higher supply from producers and subsequently lowering prices. In W18, corn prices remained at USD 0.19/kg, experiencing no changes since W16. Consumer demand for corn remained limited, anticipating a favorable harvest season. Brazil's export participation remained constrained due to stiff competition in the global market, particularly from countries like Argentina.

Argentina

In W18, Argentina's Buenos Aires Grain Exchange drastically reduced its production estimate by 3 mmt, citing issues like leafhopper outbreaks and climatic complications during harvest. Additionally, available maize stood at USD 0.18/kg in the domestic market, marking a 5.56% WoW increase.

Ukraine

The World Bank reported that during Q1 2024, prices reached a three-year low globally. Ukrainian corn experienced a decline of 11.76% YoY, driven by increased grain supply and export activity globally. Despite Ukraine's significant role as a grain exporter, particularly in corn, its impact on global prices remained comparatively limited. The country's exports, while substantial, did not exert as much pressure on prices as major producers like the US. However, with global competition intensifying due to significant harvests in key regions such as the US, the EU, and Russia, Ukraine's position in the grain market remains subject to broader market dynamics.

Romania

In W18, Romania's East EXW maize price remained stable WoW at USD 0.19/kg. However, there was a 13% decrease in the price compared to Mar-24 and a 29% decrease compared to Apr-23.

3. Other Outstanding Price Anomalies

South Africa's Maize Price Down 40% YoY but Up 27% MoM Amid Weather Anomalies

As of April 2024, the wholesale price of maize in South Africa was USD 11.32/kg, showing a substantial 40.63% YoY decrease from Apr-23's price of USD 19.08/kg. However, there was a notable 27% MoM increase from March 2024's price of USD 8.89/kg. This increase follows extreme weather conditions in Feb-24 and Mar-24, which devastated maize fields and other crops across the country. The regional crop failure is attributed to the El Niño weather event, resulting in drought conditions.

Despite a promising start to the 2023/24 season with excellent rains, a subsequent heatwave and extreme dryness during the critical pollination stage led to significant crop losses not only in South Africa but also in neighboring countries like Zambia, Zimbabwe, and Malawi.Meanwhile, the YoY decline in South Africa's local corn prices aligns with the global trend, driven by favorable production conditions and surplus availability in the local market. These prices are closely tied to export parity prices, reflecting market dynamics.

4. Actionable Recommendations

Integrated Pest Management (IPM) Practices in Argentina

Implement integrated pest management practices to combat leafhopper outbreaks and minimize pest-related damage to corn crops in Argentina. Encourage farmers to adopt sustainable pest control methods, such as crop rotation, biological control, and the use of resistant varieties, to mitigate yield losses and ensure crop health.

Invest in Climate-Resilient Farming Practices

Promote climate-resilient farming practices and technologies in France to address delays in corn sowing and declines in winter crop conditions. Provide farmers with access to weather-resistant seed varieties, precision irrigation systems, and soil conservation techniques to mitigate the impact of adverse weather events and optimize crop yields.

Enhance Forecasting and Risk Management in Paraguay

Strengthen forecasting capabilities and risk management strategies in Paraguay to anticipate and mitigate challenges in corn production. Collaborate with agricultural research institutions and meteorological agencies to improve early warning systems for climate-related risks and pest outbreaks, enabling farmers to make informed decisions and adopt proactive measures.

Diversify Export Markets in Ukraine

Diversify export markets for Ukrainian corn to reduce dependency on a single market and mitigate price fluctuations. Explore opportunities to expand trade partnerships with emerging markets in Asia, Africa, and the Middle East, leveraging Ukraine's competitive advantage in grain production to access new market segments and minimize exposure to global price volatility.

Invest in Weather-Resilient Infrastructure in South Africa

Invest in weather-resilient infrastructure and irrigation systems in South Africa to enhance the resilience of maize production to extreme weather events. Upgrade irrigation networks, water storage facilities, and flood management systems to mitigate the impact of droughts and ensure sustainable water management practices in maize-growing regions.