corncob

The corn market will be very interesting in the second half of the season

World corn production is expected to decrease in 2022/23 from 1,217 to 1,168 billion tons compared to the previous season, but will exceed 2020 billion tons in the 21/1,13 season. However, the delay in the corn harvest in Ukraine and sowing in Argentina due to the drought could soon lead to an adjustment in the forecasts.

In the December USDA report, the crop evaluation for Ukraine is precisely reduced, since as of December 1st only 2,5 million hectares or 60% of the areas, of which 15,5 million tons Corn were harvested with a yield of 6,13 tons/hectare are threshed by unfavorable weather. Some dry and frosty days this week have resumed the clearing but yesterday snow fell again and the next few days will see temperatures rise and more rain to snow.

In November, the USDA estimated the harvest in Ukraine at 31,5 million tons, but even if farmers thresh all the crops without losses, this year's harvest will not exceed 25 million tons, although last year it reached 42 million tons.

Corn purchase prices in Ukraine remain at $175-206/ton amid pressure from lower global quotes and low ship call rates to Black Sea ports.

Romania will have the lowest corn crop this year since 2007 as the drought has reduced it by 40-50% and the average yield is around 3 tons/hectare. The drought has not only affected Romania but other EU countries as well, bringing the EU crop forecast down to 53-54 million tons compared to 71 million tons in 2021/22.

There will be small rainfalls in Argentina, but the strong heat will put additional stress on the plants, which will negatively affect the harvest potential of Soybean and corn affects. The weather this week will not speed up the sowing very slowly. In general, the conditions are not favorable for the development of crops that need a lot of rain.

As of December 1st, in Argentina only 19,4% of the area was sown with soybeans and 23,8% of the planned 7,3 million hectares with corn, respectively 20% and 6,2% compared to the previous year's levels.

The growing trade dispute over GMO corn between Mexico and the USA could crash the North American corn market. Back in December 2020, Mexico banned imports of GMO corn from 2024 and imposed a phased ban on the use of glyphosate, and on November 28 threatened the USAto sue Mexico if it doesn't overturn the verdict. The USA believe a gradual rejection will severely hamper trade and hurt farmers in both countries, while in response Mexico is proposing to allow imports of yellow corn used for animal feed but white corn destined for human consumption , to disallow.

But such a compromise does not please the President of the US National Association of Corn Producers, Tom Haag, who said that the decision, everyone bioBlocking technological corn violates the terms of the United States, Mexico and Canada Agreement (USMCA).

Mexico is the largest buyer of US corn, having purchased 2021 million tons of corn in 22/16,8. More than 90% of the corn is in the USA genetically modified corn.

Chicago corn futures for December are down another 1,5% since Monday at $246,2/ton after losing 8% on the month and are approaching early March 2022 levels, although still down 12,6. XNUMX% above the level of the previous year.

Source: UkrAgroConsult (Ukraine)

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