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 News

11/10/2017 0:00 - Agricultural Commodities Market
FEDERICO DI YENNO
U.S. and Brazil corn crops dampen local prices

As harvest progresses in the United States, traders have adjusted their corn yield estimates upwards. This, combined with strong export from Brazil, has put pressure on local corn prices, giving them little chance of recovering.

In September, Brazil exported 5,914,353 million tons of corn, according to data from Brazil customs office. This figure represents a new record for the month of September and the second largest export month in record. Large Brazilian shipments been felt throughout the South American marketing year, preventing corn prices from recovering, despite active demand export demand, primarily coming from destinations in Southeast Asia.

This strong export volume comes from a remarkable 2016/17 corn crop in Brazil, which reached 98.5 million tons. The strong year-over-year increase was due given the very poor 2015/16 crop, when a severe drought affected the 2016 ‘safrinha’ (second corn crop that represents the bulk of Brazil’s corn exports) and production totaled 67 Mt.

 

Argentina’s situation

In this scenario of low prices and very strong export competition, Argentine corn has to meet the demand of different foreign destinations.

As of September 27, corn purchases from the export sector reached 21.69 Mt. This value is 25% higher than traded volume at the same time last year (17.31 Mt), but, more importantly, shows that the export would have covered the export commitments.

As of October 4, corn export sales have reached 19.5 million tons, behind the 20.4 Mt of exports sales made at the same date last year. Although foreign sales are growing, they are far from showing the pattern of previous campaigns, which can be seen in the attached graph.

 

As months go on, expectations of placing the cereal on the export market have become a little pessimistic given the large supply available. Anticipating the new USDA WASDE report, the International Cereal Council (ICC) increased its estimates of US corn production 2017/18 by 7%. According to its latest report published on September 28, “despite concerns about suboptimal conditions during pollination, harvest reports have so far confirmed strong productivity”. Therefore, the Council production figure was revised up to 6.4 million tons, to 358.4 million tons. "This figure is still 7% below the peak reached in the 2016/17 season for this exporting country and competitor of Argentine corn.

 

 Institutional video


Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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Bolsa de Comercio de Rosario Córdoba 1402 - S2000AWV
TE: (54 341) 5258300 / 4102600
TE: (54 341) 5258325 (Complejo de Laboratorios - servicioalcliente@bcr.com.ar)
Rosario - Santa Fe - Argentina

Oficina Buenos Aires Reconquista 458 piso 7° - C1003ABJ - Cdad. de Buenos Aires.
Tel: (54 - 011) 43280390/1484 43939391/9649- Fax: (54 - 011) 43939649
contacto@bcr.com.ar