Amid declining demand, corn prices fell to a 3-year low

December corn futures on the Chicago Board of Trade on Monday fell to the lowest level since December 2020 at 185.5 $/t amid declining demand and accelerating harvesting of the new crop, and on Tuesday rose 1% to 187.5 $/t with the support of hot weather in Brazil, which may delay the sowing of corn of the first crop.

According to the USDA, as of September 17, corn in the country harvested on 9% of the area (7% on average for 5 years). The number of crops in good or excellent condition decreased by 1% to 51% over the week.

Active exports of corn from Brazil in recent months reduces the demand for U.S. grain and can lead to an increase in stocks to almost 10-year high, and the reduction in demand from China adds to the pessimism of traders.

corn Exports from the United States for the week rose to 642 thousand tons, and in General in 2023/24 MG already amounted to 1.26 million tons, which corresponds to last year’s pace.

According to the state customs of China, in August, the country imported 1.2 million tons of corn, which is 33% lower than in August 2022. In general, in the first 8 months of 2023, corn imports to China decreased compared to the same period in 2022 by 12% to 14.9 million tons, while wheat imports increased by 53% to 9.6 million tons, and barley imports increased by 53% to 6.2 million tons.

In Ukraine, purchase prices are falling amid an almost complete halt in grain exports. Thus, the prices for corn deliveries to the Danube ports fell to 155 $/t, to the port of Constanta – to 190-200 $/t, to the Ukraine-Hungary border – to 155-160 $/t.

Neighboring EU countries are tightening the blocking of supplies from Ukraine, so farmers can only hope for increased exports through the humanitarian corridor via the Black Sea ports.

The heat has increased in most of Brazil this week, and could soon reach 40°C, which will hamper soybean and corn planting. According to Climatempo forecast, high temperatures and lack of precipitation will slow down sowing, and the worst weather conditions are expected in Mato Grosso, Goiás and Mato Grosso do Sul states, where the heat will reach 45-46°C in the coming days.

Tags: corn, prices