Corn prices edged up after nearing year-low

December 22, 2023

2 mins read

The CBOT corn futures MAR-23 contract price [Mintec Code: CRNC] settled at USc 469.6/56 bushel, up 2.89% w-o-w at yesterday’s close, 20th December 2023. The US corn futures edged up this week on the news of US-Mexico border rail closures that have impacted grain exports as well as uncertain weather outlooks for Brazil and Argentina. Traders' attention will now be focused on South American weather forecasts and crop size indications, as these factors are expected to be the primary price drivers in the upcoming months.

On Monday 18th December, the US Customs and Border Protection closed two key rail crossings (El Paso and Eagle Pass) into Mexico (the top importer of the US corn) due to the rising number of illegal migrants crossing. According to market players, these rail crossings account for nearly 45% of cross-border shipments and each day that the rail crossings are closed, approximately 1 million bushels of grain exports are lost. The interruption of such critical transportation routes can lead to delays, increased costs, and potential losses for farmers. Also, the just-in-time delivery system for Mexican livestock farmers, who rely on a steady supply of US corn for animal feed, could also have severe implications for the livestock industry. All stakeholders are urging the reopening of the US-Mexico crossing, and Mintec continues to monitor the situation.

On another note, there is still ongoing uncertainty regarding weather conditions in Brazil and Argentina. According to weather forecasts, for the next 2 weeks, most of Brazil's area still indicates drier conditions while Argentina is still experiencing rains. Some market players are speculating that abnormal weather patterns in Brazil will lead to the potential loss of safrinha corn acreage, and a likely shift from corn to soybean seeding in the US in spring 2024. The delayed planting of soybeans will most likely have a cascading effect on the planting and cultivation of safrinha corn. Thus, Brazil’s corn production will be largely determined by the planted acreage in the coming months.

Topics: Grains & Feed
Zanna Aleksahhina
Zanna Aleksahhina

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