The maize (corn) price on the Chicago Board of Trade (CBOT) rallied to USD 242/MT on 27th December 2021, the highest price since June 2021, due to concerns over global supplies as adverse weather conditions in Brazil and Argentina, caused by the La Nina event, continue to support the market. The CBOT maize price has since pulled back slightly (by -2% to USD 237/MT on 7th January 2022), capped by falling wheat prices.
Argentina and Southern Brazil (maize key producing regions) remain very dry, despite the recent rains. In Southern Brazil, the Parana and the Rio Grande do Sul regions have announced a state of emergency due to prolonged drought. The Rio Grande do Sul produces about 20% of the first maize crop and 7% of the overall maize output (including the second crop). According to Soybean and Corn Advisor Inc., the current dryness has implications, particularly for the first maize crop, as it presently goes through the pollinating and filling phase. At the same time, northeastern and central Brazil has recently experienced heavy rains and widespread flooding. In Mato Grasso, the largest maize producing region that accounts for 24% of the output, heavy rainfall has increased disease concerns.
In Argentina, the early planted maize is at risk to reach a good development stage, which is critical for optimal yields. The crop has been under heat stress which could impact the harvest volume and in turn, reduce global exportable supplies.
The global maize market relies on large South American crops to ease supply tightness. As a large producer and exporter, a tightening of South American supplies could result in greater price volatility across the global feed grain complex.