1. Weekly News

Global

Corn Prices Under Pressure Amid Falling Oil Prices and High US Planting Rates

Falling oil prices and high planting rates in the United States (US) are putting pressure on corn prices, but potential support could come from weather conditions in Brazil and harvest data in Argentina. On the eve of the United States Department of Agriculture (USDA)'s May-24 balance sheet release, analysts published their forecasts, estimating Argentina's corn harvest at 52.14 million metric tons (mmt) and Brazil's at 122.4 mmt, compared to the USDA's Apr-24 estimates of 55 mmt and 124 mmt, respectively. Analysts also predict a decrease in global corn stocks to 314.7 mmt, while the USDA's Apr-24 estimate was 318.28 mmt.

Argentina

Argentina's Corn Harvest Forecast Revised Downward Due to Leafhopper Damage

The Argentina Rosario Grains Exchange revised its estimate for the 2023/24 season corn harvest despite an increase in the planting area, citing heavy damage caused by leafhopper insects. The leafhopper, which transmits stunt disease that harms the cobs and kernels of the plant, has impacted approximately 20% of the corn crop this season, leading the exchange to reduce its harvest estimate for 2023/24 to 47.5 mmt from the initial forecast of 50 mmt. This adjustment comes despite a rise in the number of fields cultivating corn in Argentina’s core agricultural region, with the total planting area reaching a record 8.89 million hectares (ha).

Brazil

Brazil's 2024 Corn Commercialization Lagging at 23.3% Amid Regional Disparities

The commercialization of the corn harvest for 2024 in the Center-South of Brazil reached 23.3% of the estimated production of 86.628 mmt. This figure indicates a delay compared to the 24.6% reached during the 2023 harvest (99.098 mmt) that had already been commercialized. It is also well below the five-year average of 31.5%. Regional off-season sales rates vary significantly: Paraná at 6.1%, São Paulo at 2.3%, Mato Grosso do Sul at 20.8%, Goiás and the Federal District at 19.6%, Minas Gerais at 3.3%, and Mato Grosso leading with 34.3%.

Brazil's Corn Exports via Amazon Ports Surged 7% YoY in Q1-24

In Q1-24, Brazil saw a 7% year-on-year (YoY) increase in corn exports through Amazon ports, making them the country's largest corn export channel and accounting for 43.3% of Brazil's total corn exports, up from 36.2% in the same period last year. The Association of Port Terminals and Cargo Transshipment Stations of the Amazon Basin (AMPORT) attributes this growth to the expanding capacity of Amazonian ports, which currently stands at 52 mmt with plans for an additional 48 mmt. The Federal Government also intends to invest USD 2.83 million (BRL 14.5 billion) in new leases of port complexes from 2023 to 2026, including USD 0.55 million (BRL 2.832.83 million) for modernization in 2024, to further enhance the region's port infrastructure.

Ukraine

Ukraine Anticipates Decrease in Corn Exports in 2024/25 Season

Ukraine's corn and wheat exports are projected to decline in the 2024/25 marketing season due to reduced production volume, while oilseed exports are expected to rise. The Ministry of Agriculture forecasts a grain production of 52.4 mmt in 2024, down from an estimated 60 mmt in 2023. This reduction is due to a decrease in cultivated areas and low yields. Despite this, the Ukrainian Grain Union predicts total grain exports will reach 35.5 mmt.

Zimbabwe

Zimbabwe Faces 72% Maize Output Decline in 2024 Amid Worst Drought in Four Decades

According to a recent government assessment report, maize output in Zimbabwe will drop by almost three-quarters in 2024 due to the worst drought in four decades. The output from the 2023/24 season, ending on May 31, is estimated at 634,699 metric tons (mt), down 72% YoY, as confirmed by the Agriculture Ministry. This is compared to a previous forecast of 868,237 mt.

2. Weekly Pricing

Weekly Maize Pricing Important Exporters (USD/kg)

Yearly Change in Maize Pricing Important Exporters (W19 2023 to W19 2024)

United States

The US maize price witnessed a significant 10.53% week-on-week (WoW) and 16.67% month-on-month (MoM) increase, reaching USD 0.21 per kilogram (kg), up from USD 0.19/kg in W18. Concerns over delayed planting in the US and flooding in southern Brazil fuel this uptick.

Brazil

The wholesale price of Brazilian maize declined by 5.26% WoW, reaching USD 0.18/kg in W19. This decrease is attributed to increased supply stabilization efforts by producers and improvements in weather conditions. Despite positive harvest progression, consumers anticipate further price decreases due to comfortable stock levels.

Argentina

The wholesale price of Argentinian maize dropped 5.26% WoW and 14% YoY, reaching USD 0.18/kg, from USD 0.19/kg in W18. This decline is due to the arrival of the harvest in Argentina, leading to increased supply in the market.

Ukraine

Ukrainian maize prices increased by 6.67% WoW and month-on-month (MoM) to USD 0.16/kg. This uptick is driven by increasing demand from foreign importers, particularly China, along with other countries like Türkiye, Egypt, Italy, and Spain.

Romania

In Romania, maize prices saw a notable 10.53% WoW increase but witnessed a significant 19.23% year-on-year (YoY) drop. This price fluctuation coincided with a rebound in maize production following a decline in yields attributed to drought the previous year, as indicated by preliminary data from the National Statistics Board. Maize harvest in Romania reached 8.52 mmt, marking a 6% YoY increase.

3. Other Outstanding Price Anomalies

South Africa's Sweet Corn Price Surged 29% MoM in Early May-24 Amid Crop Forecast Concern

As of early May-24, the wholesale price of sweet corn in South Africa stood at USD 14.62/kg, marking a significant 33.93% YoY decrease from May-23's price of USD 22.12/kg. However, there was a notable 29% MoM increase from Apr-24's price of USD 11.32/kg.

The South African Crop Estimation Committee (CEC) has revised its 2023/24 corn production forecast down 19.3% YoY to 13.26 mmt due to high temperatures and rainfall shortages in Feb-24. The final production estimate comprises 6.28 mmt of white corn and 6.98 mmt of yellow corn, marking a significant decline from the previous year's production. This unexpected weather pattern has raised concerns for South Africa's corn supply and neighboring countries.

4. Actionable Recommendations

Enhance Pest Management Strategies in Argentina

Given the significant impact of the leafhopper on Argentina's corn harvest, agricultural authorities and farmers should prioritize developing and implementing robust pest management strategies. Invest in research and development of resistant corn varieties, deploy targeted insecticide applications, and promote integrated pest management practices to mitigate the damage caused by leafhoppers effectively.

Improve Harvest Timing and Commercialization in Brazil

To address the delay in corn commercialization and leverage the expanding port infrastructure in Brazil, stakeholders should focus on optimizing harvest timing and logistics management. Encourage farmers to synchronize planting schedules to facilitate a more uniform harvest period. Enhance coordination between producers, traders, and transporters to expedite the movement of corn from farms to ports, maximizing market opportunities and minimizing storage costs.

Diversify Export Markets for Ukrainian Grain

Given the anticipated decrease in corn exports from Ukraine, diversification of export markets is essential to mitigate the impact of reduced production volumes. Explore new trade partnerships in regions with growing demand for grains, such as Asia and Africa. Develop targeted marketing strategies to promote Ukrainian maize's quality and reliability, attracting buyers from diverse geographic regions and reducing dependence on traditional export markets.