The market continues to monitor US corn exports and the Black Sea situation

The international corn market showed some slowdown last week. The very strong dollar and low wheat prices had a negative impact on corn prices. However, exports are continuing at a good pace, keeping the market without a bearish bias and awaiting the January events. The final report on the 2024 crop, the attempt to reach an agreement in the Black Sea regarding the war, and the climate in South America will continue to be determinant for prices.

The key point for corn prices in the first half of 2025, on the international market, seems quite clear, namely the pace of US exports. Last week, sales reached 36 mln tons, up 8 mln from the same period in 2023/24. Brazil’s supply limitations in the first half of 2025 are a fundamental factor, and so are Ukraine’s lower availability and the still open crop in Argentina. It seems natural that the market will continue to seek supply security for the first half of the year in the US market.

The second major point will be the planting bias for the 2025 US crop. With the possibility of a sharp decline in soybean prices, due to the large South American crop, and the maintenance or even increase in corn prices on the Chicago Board of Trade, the exchange ratio could move toward a recovery of 1 to 2 mln acres in corn, in contrast to a proportional cut in soybeans. One symptom that may suggest some concern for the upcoming US spring/summer is the current winter weather scenario, with above-average temperatures at the start of winter, a situation that usually brings a sequence of not very favorable weather for US summer crops.

Before that, there is the report from the United States Department of Agriculture (USDA) on January 10. This is a report where the main information is the closing of the 2024 crop, that is, the consolidation of data and finalization of estimates. This is a report that can always bring surprises, given that consulting firms cannot “read” the data in the USDA system and point to a direction of cuts or increases in this final production data. So, pay close attention to the report.

Last week, prices felt the impact of a very strong dollar, reaching 108 points in the dollar index, the highest since 2022. A strong dollar is a negative point for commodities listed on the Chicago Board of Trade. Besides the currency, low wheat prices are also putting pressure, even after Russia cut wheat export quotas last week. The point of attention is the new potential effect of the US government on the war between Ukraine and Russia, which continues to accelerate. A long or final truce of the event could have an impact on the prices of wheat, sunflower seed oil, corn, fertilizers, and fuels. Difficulties in ending the war could highlight an expansion of the scope of actions to end it. Thus, January will have this type of expectation on markets as well.

In Argentina, rainfall has been more limited this December. The month should end with spottier rainfall and only return in better conditions in the second week of January. Temperatures should also rise sharply in January. We are in the middle of the South American “weather market”, and Argentina is always a key point for corn, as it is the largest exporter in the first half of the year. Leafhoppers continue to be reported but so far they have been controlled by producers.

Tags: corn, Brazil, prices, soybeans, US, wheat, crop, Black Sea, Market, Ukraine, exports