Commodities Bulletin #8 Corn Prices

Corn prices have continued their downward trend over the past few months. Falling wheat prices continued to support the downward trend, but while the US market was more sensitive to worsening conditions in Argentina, European prices were pushed down by abundant Ukrainian exports.

• USA: Consumption has decreased and imports have been similarly reduced, leaving ending stocks unchanged. Sowing is ongoing, in line with previous years, with drought limited to 29% of all corn cultivated areas.

• UKRAINE: Total exports are on the rise, due to the renewal of the agreement to export from the Black Sea. Some EU countries bordering Ukraine have complained about the arrival of large quantities of Ukrainian corn, which has caused large price drops and they plan to introduce more controls and restrictions. A decrease in production is expected in the face of decreasing acreage in the next season.

• EU: Production was revised downwards while imports increased at the same time. The high need for imports is confirmed by the fact that imports from July to April were 72% higher than the previous year. As for the 2023/24 season, according to the EU Commission, the corn sowing acreage is expected to decrease by 4%, but production is expected to recover following last year's drought.

• BRAZIL: Expectation of a record production is confirmed and the first crop of corn is being harvested. Overall, the weather is favourable.

• ARGENTINA: Argentine corn continues to be affected by the extreme drought that has hit the country in recent months. The harvest has begun, but conditions remain critical.

The market remains short and therefore exposed to bullish volatility. Prices are expected to remain at lower levels than at present for the next campaign due to production being expected to pick up in both the US and the EU, good weather conditions permitting. Rainfall and temperatures in the main production areas still need to be monitored, as do developments in the Ukrainian conflict and the euro/dollar exchange rate.