The CBOT corn futures MAR-23 contract price was at 674.6 USc/56 bushel at the time of writing (26th January 2023), down marginally 0.97% w-o-w. Corn prices were under pressure due to improved weather conditions in Argentina.
The rain in Argentina should reduce further downside risk on the Argentinian corn crop. However, much of the crop damage is already done. According to a Mintec source, “people are talking about 52 million mt for Argentinian corn production, but maybe it will be less than that because the drought was severe. However, last week and this week, Argentina received a good amount of rain. For corn is difficult to say because farmers postponed the window of the soy period, so I don’t know if a lot of farmers were able to switch from the early varieties to late varieties. But what I saw when I was there [in Argentine fields], I think 52 million mt is a lot, I would assume it is lower.” The market will be closely watching the realised precipitation in Argentina, as Argentine weather will continue to be a significant price-driving factor in the coming weeks.
In addition, the market believes that the future price action will be a function size of the second corn crop in Brazil, which is a more significant portion of the Brazilian corn crop. A Mintec source added, “good soil moisture levels in Brazil should only help with the crop size. Currently, the estimation for the second corn crop is at 99 million mt, and this will be the largest in history if everything goes okay with the weather.”
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