The CBOT corn futures DEC-22 contract price was at 663 cents/56 bushel at the time of writing (24th November), down 3.18% month-on-month (m-o-m). Renewal of the grain corridor deal, together with slightly improved weather (in the last weeks of November) in South America, has made the supply side stronger against the recent pace of demand. Nevertheless, the market remains focused on South American weather, as this will be important for the size of the corn crop, which will dictate the price direction in the coming weeks.
In Brazil, planting the first crop was progressing with a slight reduction in the total planted area due to a switch to soybeans this month. As of last week, the first crop was 82% planted, down 9% year-on-year (y-o-y). According to the National Association of Cereal Exporters, exports from Brazil have more than doubled in November, at 6.64 million metric tonnes, up 142% compared to the same period last year. A Mintec source noted, “We have a record harvest, and now the war in Ukraine and bad weather in Europe have increased imports for Brazilian corn”.
However, in the US, dry weather continues, and 2022/23 corn crop yields are worse than expected. As of 22nd November, around 68% of the US was under abnormally dry to extreme drought conditions, according to the US Drought Monitor data. Nevertheless, 96% of the US corn has been harvested, compared to a five-year average of 90%.
In Ukraine, the corn harvest is ongoing with a slight delay, around 40% has been harvested. According to a Mintec source, “The corn we are harvesting now is not of such good quality, 2-7% is damaged grain, and this will probably be sold for ethanol production”. The USDA estimates Ukraine’s 2022/23 corn production at 31.5 million metric tonnes, down 25.2% y-o-y. According to Mintec sources, the estimate is around 26 million metric tonnes.