Porto Alegre, November 14, 2022 – With the US harvest of corn coming to an end, the market is focusing on factors such as US exports, the Ukrainian export corridor, and the weather in South America. The week can be considered positive for commodities, with the recessive aspect having been diminished and the devaluation of the dollar helping the market to gain space in prices on the Chicago Board of Trade (CBOT). With the improvement of navigability on the Mississippi River, perhaps US exports will recover again, despite the ideological Mexican decision to ban the importation of transgenics.
This November’s USDA supply and demand report did not bring any major surprises regarding market expectations. Initially, there was an expectation for an increase in the US productivity of this crop, which was confirmed, to 172.3 bushels/acre, putting this year’s crop at 353.8 mln tons. Carryover stocks stood at 30 mln tons, within a security point for supply.
The discussion point for this report was the 2023 export forecast. The weekly shipment for this period of the year amounts to 1 to 2 mln tons and is below 500 thousand tons. USDA could correct the outlook downward for the year due to this poor start to exports. However, the Mississippi River seems to have partly regained its navigability, facilitating the pace of exports. After that, everyone knows that Brazil, as of January, will reduce its sales, Argentina has already reached the export limit for the current business year, and Ukraine has not yet defined the maintenance of its export corridor. Demand will eventually resume US purchases in the first half of 2023.
USDA cut the European crop to 54.8 mln tons, following the line of the European Union management, but without raising the import target for the business year. The option was to cut the forecast for feedstuff demand instead of maintaining imports.
China and Ukraine showed no changes in the supply and demand scenario. China is reaping its record crop and the government released a figure above that from USDA, that is, 275.3 mln tons. It seems difficult that China will decide on large imports before April/May next year, aiming at shipments for June onward. Meanwhile, isolated purchases only serve consumers in the south of the country. Brazil even loaded a 30,000-ton ship in October for China, which is far from the volumes that the agribusiness media places in the Brazilian market.
The focus now is on the week’s definition of the continuity or not of the Ukrainian export corridor, which ends the agreement between the UN and Russia on the 19th. Later, the US export flow and the weather in South America.
Follow the Safras Agency on our website. Also follow us on our Instagram and Twitter and stay on top of the main agribusiness news!
Copyright 2022 – Grupo CMA