Porto Alegre, December 20, 2022 – Brazil is running out of its capacity to enter February/23 with high sales in world exports. Even if planned so, ports prepared for the flow of soybeans will create logistical limitations for corn. However, Europe will need 23 mln tons of imports in 2023 and will not find all this volume in Brazil, Ukraine, and Argentina. So demand will have to convert to US corn, and exports from this source could grow in the coming few weeks. Therefore, prices on the CBOT remain balanced and without strength for sharp lows. Another key point is the weather in Argentina, as this exporter could help supply the international market from May.
US weekly exports once again got close to 1.0 mln tons. The key point is the slowdown of prices on the CBOT associated with lower premiums in the Gulf of Mexico. Lower FOB prices represent better competitiveness against South America, and this could generate an environment for recovering sales from now on. China, with a record crop, will not resort to the US market until April/May, at least. Brazil as an option with its 2023 second crop is not ruled out, maybe as a way of acting to bring down prices on the CBOT.
Another point is that there is a healthy demand, at the moment, in Europe, the Middle East, the rest of Asia outside of China, Colombia, and Mexico, which will have to be met by a large exporter in the first half of 2023. And this exporter will be the United States United. Argentina is the alternative for a good supply of the European demand due to the restrictions of this consumer to transgenics.
Owing to the weakening of the La Nina phenomenon in December and the warming of the South Atlantic, according to some meteorologists, the weather in southern Brazil and Argentina may improve in terms of rainfall from next weekend. If this is confirmed, the planting could extend until the first half of January and, as we can observe through the 5-year average, there is nothing that brings deterioration of the production potential for the time being. The next 30 days will be crucial to determine the area to be planted and the crop development.
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