The record US corn yield hit the market very hard. Short position from
speculative funds skyrocketed, causing CBOT corn prices to reach a
minimum in more than a year. In the local market, export activity did
not meet initial expectations. However, November export performance
could make a difference
In the last week, local market exhibited prices around AR $ 2,350 / t, not
generating great sales enthusiasm, while the 2017/18 corn prices deflated
from $ 150 to 141 / t, mainly due to the big global corn supplies. Unless
some inclement weather arises, the prices will be calm wrapped in
The optimistic part is that corn prices digested the oversupply situation
and now the market turns its attention to South America, where any adverse
climate factor could trigger a rally in prices. With a probability of
65-75% of “La Niña”, the high temperatures recorded are a wake-up call. If
there are no short-term rains next week, the corn condition could begin to
show symptoms of water deficit.
As for the export balance of 2016/2017 corn in Argentina, the initial
expectations of 28 Mt are not being met and current forecasts are around 26
Mt. However, domestic purchases made from exporter firms total 23.8 Mt,
covering 63% of total production (38 Mt), compared to 61% of last season.
The shipping commitments for November are active, as can be seen in the
figure of trucks delivered to the main terminal ports (Gran Rosario) in the
following chart. These figures show higher levels both in October and in
November compared to the previous two marketing crop years.
New crop that it is currently harvested in the north of Argentina is
starting to flow through the market. With a harvest 13% completed, wheat
prices were around $ 2650-2750 / t, while the deferred positions –December
and January- found offers at $ 160-165 / t. The BCR trading floor woke up
with approximately 100 thousand tons negotiated this week for delivering to
the ports of Rosario.