Porto Alegre, January 24, 2023 – Corn prices on the Chicago Board of Trade are maintaining a relatively high profile under the expectation that global demand will shift to US corn from February. With Brazil sharply reducing its shipments and Argentina with uncertain and delayed production, global supply sources will be limited to the United States for at least until July. The second focus for the market is the US planting intentions report to be released on March 31.
US weekly exports once again surpassed one mln tons last week. This is a movement that has been expected from the moment that global demand does not find the same supply volumes in Brazil and Argentina for the first half of 2023. The next European crop will only reach the market in September, and the same happens with Ukraine and the USA. Despite the arrival of El Nino, it is still uncertain whether the climate will be suitable for these next crops.
So, the international market has been trying to absorb as much as possible from Brazil and is betting on the Argentine crop to be supplied between May and July. As of July, the Brazilian second crop will collaborate for this supply again. However, everything will really depend, for international prices, on the profile of this 2023 US crop. The decline in urea prices is a major factor in the US producer’s decision to resume corn planting, which could happen this year without affecting the soybean area. However, until the definition of this year’s production, there will be all the weather variables until September, with speculative movements. The arrival of El Nino quite contributes to a vision of a possible normal crop in the Northern Hemisphere.
Meanwhile, there is the definition of the Argentine crop. The new corn area cogitated in Argentina is 7.1 mln hectares, against 7.8 mln in the previous season. For this reason, there is already a projected production cut from 54/55 to 49/50 mln tons. Now, there is the evaluation of the lost areas, mainly Santa Fé and the northeast of the country, the most precocious corn. The evaluations of Cordoba and Buenos Aires will be different, as they were the locations that received the most rainfall. This last weekend, it rained again in this region of the country which comprises the biggest producers. For the last 15 days, between 90 and 120 mm were accumulated in the Core region. This is a difficult Argentine season, even with the presence of La Nina. There are new forecasts for rain for this week, a factor that could help define a trajectory toward the end of the drought in the country.
A crop of 45/48 mln tons for corn still seems possible, with a good portion destined for silage, of course, if the rains continue in good progress in February. Larger reaped volumes can only be expected after April.
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