Porto Alegre, September 9, 2024 – The corn market is trying to generate some expectation of a cut in US productivity and production in this September USDA report. The decline in prices to near the country’s minimum level, USD 3.70/bushel, is starting to worry the US market, and, even during the maturation stage, the attempt is to find some variable for lower production and inhibit a faster price decline with the harvest. In fact, small corrections until January are normal. The focus, from now on, is really on the flow of exports and some new fact that may arise after the harvest to consistently put prices above USD 4.00/bushel on the Chicago Board of Trade.
The US harvest must advance in the coming few days and exert its power of consolidation on corn prices in the international market. After this week’s USDA report, which suggests productivity below the record set by USDA in August of 183.1 bushels/acre, the focus will be on the flow of local exports.
Rainfall over the past 14 days across the Midwest has been satisfactory in maintaining a good structure for the closing of pod filling and start of maturation. Therefore, either slightly above or slightly below, production has little impact on a situation that is completely comfortable. Of course, in an environment where prices are returning to the average, volatility in any variable ends up prevailing.
From now on, however, the focus will be on the flow of weekly exports. Exports reached 1.82 mln tons this week, the best number of the year, and we can assume that global demand has shifted to corn, which currently has lower FOB prices. With prices on the CBOT returning to the average, the United States has basically regained its competitiveness in exports and will resume its position as the world’s leading exporter. Even with the devaluation of the real, Brazil is not able to keep up with a lower price profile, with very high premiums and a supply that seems comfortable enough to enable exports of over 40 mln tons this business year. Therefore, it seems clear that international demand will shift to US corn due to easier purchases and more affordable prices.
After that, attention will turn to the South American crops. Brazil and Argentina will have a production cut in the 2024/25 summer crop, which could make it easier for the United States to make good exports in the first half of 2025.
Safras News