Porto Alegre, November 5th, 2024 – The international corn market has few surprises at the moment. There was tension about rain in winter wheat regions, such as the Plains in the United States and the producing regions in Russia. The rain returned, and wheat prices slowed down again, taking corn with it. Besides, threats in the Middle East brought some tension to oil prices last week. With expectations reduced, oil prices fell again, affecting corn. Rain in South America and only normal US exports over the week also contributed to a week of stable prices on the CBOT. Basically, the market now needs a strong flow of US exports to seek a positive correction in the local post-harvest period.
The international corn price environment showed a week of slowdown. The US harvest reached close to 80% in the United States and should be extended a little in this final phase due to the rain throughout the Midwest expected at the beginning of November. As the 386 mln tons arrive in the local physical market, attention continues to the flow of weekly exports. Once again, weekly sales were high, at 2.34 mln tons, but this volume was already known due to purchases from Mexico and other destinations the previous week. Sales for this 24/25 business year have now reached 25.8 mln tons, compared to 14.9 mln in the same period last year. If this pace remains high for the first half of 2025, USDA may have to raise its projection for annual exports, currently estimated at 59 mln tons.
Brazil’s difficulties in exporting large volumes this year, Ukraine’s smaller crop, and doubts about the size of Argentina’s 2025 production bring an optimistic outlook for US exports this business year. It is still difficult to define whether this will be enough to boost corn prices in the first half of 2025 or right after the end of the local harvest.
Corn, due to good US stocks, also depends on other indicators. The Argentine crop, which has been developing well so far, is paying close attention to the spittlebug pest in the province of Buenos Aires. At the moment, the rain is very good across the producing region, and the later corn planting continues at a good pace. Moreover, the rain for winter wheat in the United States and Russia has been a concern in recent weeks. Now, the rain has returned to a good level, and wheat has ended up losing strength for price recovery on the CBOT this week, of course, also bringing pressure to corn. Finally, the conflicts in the Middle East continue to receive strong attention due to their inherent risks to the oil market and the global economy. Oil prices yielded again at the end of the week, bringing some easing to the energy markets.
Therefore, the international market needs new facts for corn to break this range of USD 3.80 to 4.20 a bushel. The bullish arguments, however, are all centered on US exports from now on.
Safras News