Improved weather in Brazil lowers world corn prices, halting their growth in Ukraine

Amid lower rainfall in Brazil, first-crop corn has been harvested on 9% of the area, and second-crop corn has been planted on 2.2% of the planned area. This week, the pace of work may accelerate, forcing traders to take profits after speculative growth.

the March corn futures on the Chicago stock exchange yesterday fell another 0.9% to 189,8 $/t (-1.6% for two days, +6.4% for the month).

Recent rains in Argentina have reduced the heat and slightly improved the condition of corn crops, and projected for next week additional rainfall will reduce speculative demand. Another factor of pressure on the quotes was the reduction of export duties in Argentina, which will increase the supply of corn on the world market.

Export demand prices for Ukrainian corn this week reached 212-214 $/t or 10100-10200 UAH/t with delivery to the ports of the black sea, which increased sales by farmers. However, the decline in quotations on world markets could lead to a drop in prices in Ukraine.

The market believes that due to the surplus of feed wheat on the Turkish market, local authorities may postpone the introduction of the import quota of 1 million tons of corn with a 5% duty, which will negatively affect the prices of Ukrainian corn.

Сorn exports from the U.S. during January 17-24 decreased by 19% to 1,247 million tons, but in General in the season reached 20.5 million tons, which is 31.4% ahead of last year’s pace. However, the USDA export forecast is 62.2 mln tons, which is 6.8% more than in the previous season. Now it is important to monitor the relations between the US and Mexico, which is the main importer of corn from the US.

Mexico agreed to accept the planes with migrants from the US after the demonstrative introduction and abolition of duties for Colombia. However, on January 27, Mexican President Claudia Sheinbaum submitted to Congress a draft constitutional reform aimed at protecting corn by banning the cultivation of GMO corn in the country. She explained that the amendments to the Constitution would define corn as an “element of the national identity” of Mexicans and at the same time prohibit the cultivation of transgenic corn.

Earlier, the United States and Mexico had been in dispute over former President Andres Manuel Lopez Obrador’s ban on the use of GMO corn for food. The US demanded that this decision be canceled as it violated the free trade agreement.

Tags: prices, Ukraine, corn, Brazil