1. Weekly News

Global

Global Corn Production Forecast Dips for 2024/25

The latest global corn forecast for the 2024/25 season estimates 1.217.2 million metric tons (mmt) of production, marking a 0.7% decrease from the previous cycle's 1.225 mmt. This decline is due to reduced outputs in the United States (US) and European Union (EU), with US corn production expected to reach 386.2 mmt, down 0.9% year-on-year (YoY), and the EU projected to drop by 4% to 59 mmt. Ukraine faces a significant decrease, with output forecasted to fall 19.4% to 26.2 mmt. In contrast, Brazil's production will grow by 4.1% to 127 mmt. Argentina's harvest could see a 2% increase to 51 mmt. World corn exports are expected to decrease by 2.7% YoY, from 195.8 mmt in the last cycle to 190.5 mmt.

Brazil

Brazilian Corn Exports Declined Sharply Amid High Prices and US Competition

According to the Foreign Trade Secretariat (SECEX), Brazilian unmilled corn exports (excluding sweet corn) reached 3.91 mmt in Oct-24. This volume marks a sharp decline, representing just 46.32% of the 8.45 mmt exported in Oct-23. The daily average shipment rate fell 30.5% YoY, from 402,306.6 mt to 279,553.4 mt. This year has been challenging for Brazilian corn exports, with year-to-date exports trailing by approximately 10 mmt compared to last year. Revenue has also dropped significantly, totaling USD 778.523 million in Oct-24 versus USD 1.902 billion in Oct-23. This resulted in a 38.6% decrease in daily average revenue, from USD 90.602 million to USD 55.608 million. The average price per/mt has shown a notable decline, further impacting Brazil's position in the export market.

United States

USDA Crop Report Shows Accelerated US Corn Harvest Progress

According to the United States Department of Agriculture (USDA), US corn harvests advanced from 47% in W41 to 65% in W42, surpassing last year’s progress of 55% and the five-year average of 52%. Moreover, corn crops classified as mature increased from 94% to 98% over the past week, indicating that most crops are nearly ready for harvest. Analysts had anticipated the corn harvest to reach 63% by this date, making the USDA’s 65% report slightly higher than expected, reflecting favorable harvest conditions and strong momentum in the corn belt.

Vietnam

Vietnam’s Corn Imports Reached 6.93 MMT in First Eight Months of 2024

From Jan-24 to Aug-24, Vietnam imported over 6.93 mmt of corn, valued at more than USD 1.72 billion, with an average price of USD 247.4/mt. This reflects a 29.5% YoY increase in volume and a slight turnover rise of 0.07% despite a 22.8% drop in price compared to the same period in 2023. Argentina emerged as the largest supplier, accounting for 58.3% of the total volume, with over 4.04 mmt valued at approximately USD 978.45 million. Brazil was the second-largest supplier, contributing nearly 1.79 mmt worth USD 453.89 million at an average price of USD 253.9/mt. Laos accounted for a smaller share, with 74,589 mt valued at USD 18.64 million.

2. Weekly Pricing

Weekly Maize Pricing Important Exporters (USD/kg)

Yearly Change in Maize Pricing Important Exporters (W43 2023 to W43 2024)

US

In W43, wholesale maize prices in the US remained stable week-on-week (WoW) at USD 0.18 per kilogram (kg) but experienced a decline of 5.26% month-on-month (MoM) and 28% YoY. The corn harvest increased 17% WoW in W42, exceeding last year’s progress of 55% and the five-year average of 52%, contributing to increased supply. Moreover, the USDA projected an upward revision of corn production for 2024, estimated at 15.186 billion bushels with an average yield of 183.6 bushels per acre. The improved production outlook has eased supply pressures, significantly impacting the YoY price reduction.

Brazil

In W43, wholesale maize prices in Brazil rose 5% WoW, MoM, and YoY, reaching USD 0.21/kg. This increase is due to delays in corn planting due to adverse weather conditions. Farmers are experiencing interruptions in planting because of drought, resulting in variable productivity based on rainfall. The total acreage for the first corn crop is estimated at 9.26 million acres, down 6% YoY, leading to a production estimate of 23 mmt, a decrease of 2%. Meanwhile, safrinha corn acreage is expected to cover 39.19 million acres, a 2% decrease, with production projected at 100 mmt, reflecting a 10% increase. Brazil's corn production for the 2024/25 season is estimated at 125 mmt, marking a 2.5 mmt increase from 2023.

Argentina

In W43, the wholesale price of Argentine corn fell by 14.29% WoW and 33.33% YoY, settling at USD 0.18/kg. Continued rainfall is expected in Argentina's agricultural region into Nov-24, following significant precipitation that has alleviated a recent dry spell, facilitating regular corn planting. The 2024/25 corn harvest is projected to yield approximately 51 to 52 mmt, with the recent rains anticipated to enhance crop output further.

Ukraine

Ukrainian wholesale maize prices held steady WoW at USD 0.20/kg in W43, reflecting a substantial 100% YoY increase from USD 0.10/kg in 2023. The Ukrainian Agrarian Council (UAC) revised the USDA's forecast for Ukraine's corn harvest downward by 1 mmt to 26.2 mmt due to dry weather conditions, contributing to the price surge. Moreover, challenges continue as the country's reliance on deep-sea ports has resulted in a 13% YoY decline in the once-significant export route through Constanta.

Romania

In W43, Romanian maize wholesale prices stood at USD 0.20/kg, marking an increase of 17.65% MoM. Romania, Europe’s second-largest grain exporter, is contending with a notable reduction in corn harvests due to one of the most severe droughts in decades. Nearly 2 million ha of farmland are impacted, with corn output projected to decrease by 10 to 15% for the Oct-24 to Sep-25 season. This anticipated reduction raises concerns about tighter supply and potential market disruptions in the coming months.

3. Actionable Recommendations

Diversify Import Sources in Vietnam

Vietnam should work towards diversifying its corn import sources by seeking new suppliers from different regions. This includes establishing agreements with Thailand, the Philippines, and Indonesia to provide reliable alternative sources and stabilize prices. By fostering closer ties with these regional suppliers, Vietnam can reduce its dependence on traditional sources like Argentina and Brazil while minimizing transportation costs. Additionally, investing in domestic corn production through support for local farmers and participation in Association of Southeast Asian Nations (ASEAN) trade initiatives can strengthen food security and create a more resilient supply chain, allowing Vietnam to navigate global market fluctuations better.

Promote Sustainable Farming Practices

US corn producers should adopt sustainable farming practices, such as crop rotation, cover cropping, and integrated pest management. These practices can improve soil health and resilience to climate variability, enhancing overall yields. By increasing sustainability, US farmers can mitigate the impact of adverse weather conditions on crop yields, stabilizing production levels in the face of climate challenges. Improved soil health and reduced reliance on chemical inputs can enhance marketability and consumer demand for sustainably produced corn.

Enhance Export Infrastructure in Brazil

Brazil should improve its export infrastructure to facilitate quicker and more efficient shipping processes. Upgrading ports, improving logistics, and implementing better supply chain management systems can help streamline exports and reduce losses due to delays and logistical issues. Enhanced export infrastructure will enable Brazilian producers to respond more swiftly to global market demands, reducing the gap between production and export capabilities. This could stabilize revenue streams and improve competitiveness in the worldwide market.

Sources: 3tres3, Portal Do Agronegócio, NoticiasAgricolas, Productiva Cm, G1 Globo, Hellenic Shipping News