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Global Corn Market Analysis: Brazil, Argentina, and China in focus

30 April 202410 min reading

Luiz Carlos Santos Jr.
Associate Director
SA Commodities


In Brazil, the corn market faces challenges with a forecasted 16% decrease in production due to area reduction. The first harvest is progressing with 56.7% completion, but shipments dropped by 91% in April compared to last year. Dryness and heat threaten corn crops, especially in regions like Paraná and Mato Grosso. Meanwhile, Argentina anticipates a 30% yield decrease due to disease and delayed harvests. In China, abundant rains boost second corn prospects, potentially impacting corn demand from Brazil.

The Brazilian National Supply Company (Conab) released its last report on April 11th, providing updates on the monitoring of Brazilian crops and the development stage of corn crops for the 2023/24 summer harvest and the second 2024 harvest in Brazil. According to the report,  the second corn harvest has officially concluded, after reaching 99.9% by the third week of April. So far, crops are divided between 0.3% in emergence, 24.2% in vegetative development, 43.2% in flowering, 32.1% in grain filling and 0.2% already in maturity. Meanwhile, the first 23/24 harvest in Brazil continues to progress, with 56.7% of the total forecast completed, a percentage lower than the 59.6% of the same harvest period last year. 

The most advanced states in harvesting are Sao Paulo (100%), Parana (96%), Santa Catarina (90%), Rio Grande do Sul (82%), Minas Gerais (56%), Bahia (32.8%) and Goias (6%). First-crop corn crops are divided into 0.4% still in the vegetative development phase, 2.2% in flowering, 12.6% in grain filling, 28.2% in maturation and 56.7% already harvested.  Conab reports that Brazil will harvest 110.964 million tons of corn, about 16% less than last season, due to a reduction in acreage, especially for second corn.

Brazil shipped 91% less corn per day in April/24 than April/23

On the other hand, the amount paid per ton rose 31.5% from one year to the next. On April 22nd, the Foreign Trade Secretariat (Secex) reported that the volume shipped of unground corn (except sweet corn) reached 34,235.7 tons. The volume represents just 7.27% of the total exported in April last year, which was 470,805 tons. The daily average of shipments until the third week of April/24 was 2,282.4 tons, representing a drop of 91.3% in relation to the daily average shipped in April of the previous year, which was 26,155 tons. Between January and March Brazil exported 7 million tons compared to the 9.4 million accumulated in the first three months of 2023.

This April is shaping up to be a very cold month for shipments. However, despite this deviation from last year, when we consider previous years, it still does not signal alarm. We have experienced much worse starts to the year before, and historically, the market has seen more activity in the second half of the year.

Regarding revenue, Brazil raised a total of US$ 14.007 million until the third week of April/24, compared to US$ 146.507 million in April of last year. Which in the daily average leaves the current month with a drop of 88.5%, resulting in US$ 933.9 thousand per business day compared to US$ 8.139 million in April of the previous year.

DRYNESS AND HEAT WILL HARM CORN CROPS

The analysis draws attention to the weather conditions at the beginning of the corn harvest. Many producers choose to plant cotton at this time of year. According to the latest analysis carried out by the company, more than 90% of the national corn in the second harvest has already been sown. The crop is in the vegetative development, emergence and flowering phase. In Mato Grosso (MT), climatic conditions favored the development of the crop, with an average planting date earlier than observed in the previous harvest. In Paraná, the lack of rain and high temperatures negatively affected crops, which could cause a delay in relation to the last planting.

The 2024 off-season planting has faced several challenges, such as delays in sowing and intense weather events due to El Niño. Extreme weather events, such as intense rains in the South Region and low rainfall associated with high temperatures in the Central-West, can delay planting and lead producers to reduce the area allocated to corn cultivation.

Another point observed was the below-average planting of corn crops. To avoid losses, many farmers opted for cotton cultivation. The states Mato Grosso, Paraná and Mato Grosso do Sul are the main states in producing the commodity.

A farm association from Mato Grosso do Sul estimates that at least 10% of the second corn crop has poor growing conditions. For the last week of April, rainfall is only predicted by Brazilian weather forecaster Climatempo in the southern states of Parana and Rio Grande do Sul with insignificant impact on safrinha.

For the 2023/24 harvest, Conab forecasts a total production of 111 million tons of corn, an expected decrease of 15.9%, compared to the harvest previous. This reduction in total production is a result of the shrinkage of corn area, with emphasis on the drop in the second harvest, together with lower projected productivity in the field. It is worth noting that Conab projects a decrease of 8.5% in planted area and 8.1% in productivity of the sector.

Regarding domestic demand data, the company believes that 83.9 million tons of corn from the 2023/24 harvest should be consumed internally throughout 2024, i.e. an increase of 5.5% compared to the previous harvest.

Regarding the trade balance, Conab projects an expansion in the volume of total imports for the 2023/24 harvest, projected at 2.5 million tons of grain, due to the prospect of lower national production.

To the exports, with the expected lower national supply, Conab estimates that 31 million tons will leave the country via ports, this volume is 43.3% lower than that estimated in the 2022/23 harvest. At this juncture, it is believed that the reduction of Brazilian production, added to the greater supply available on the market international market (amid the good North American and Argentinean harvests), should reduce the volume of Brazilian grain exports in 2024.

As a result, the corn stock in February 2025, that is, at the end of the 2023/24 harvest year, should be 5.6 million tons, this amount being 21% lower than the 2022/23 harvest.

CORN PREMIUMS ON THE RISE

The Brazilian corn market for export registered rising premiums, according to information released by TF Agroeconomic. Premiums advanced another $6 cents to $68 cents/bushel in Jul/24 and another $8 cents to $60 in Aug/24; they maintained $60 in September/24 and $58 in October/24, in the ports of Santos and Tubarao.

In China, corn prices closed at a new high of 6 CNY/t for May and fell 3 CNY/t for July. The price of corn starch, in turn, rose again by 3 CNY/t for May and 9 CNY/t for July. Egg prices remained stable in April and rose by 27 CNY/500kg for May. And the price of pigs rose by 10 CNY/t for May and 20 CNY/t for June.

In Argentina, the corn market experienced “an improvement in its level of activity, where we found a marginal cut in the number of buyers who actively participate in the acquisition of cereals. The MATBA price fluctuated to US$ 183.20, on wheels in the port, for April, against US$ 179.00 previously and Chicago at US$ 173.12”.

The approximate prices of Argentine corn FOB closed at around US$197 for April, US$204 for May and US$201 for June. Flat corn prices rose to US$ 192 FOB in the USA, rose to US$ 196 FOB Upriver (official), in Argentina, rose to US$ 207 FOB in Santos, Brazil, are at US$ 212 FOB in France, they are at US$ 200 FOB in Romania, they are at US$ 175 in Russia and US$ 175 in Ukraine.

There is still a good volume available in Paraguay. “Some interesting sales in the local market at levels equivalent to 187 dollars in Asunción, most likely that the deals were for the ethanol industries, and that the poultry industries with their indications took 180 dollars”.

ARGENTINA

The Rosario Board of Trade in Argentina recently projected corn yields to be down 30% due to stunt spiroplasma disease. That estimate would lower the country’s production by 7 million metric tons to 50 million metric tons. Spiroplasma disease stunts corn growth and turns leaves red. The disease was caused by three consecutive years of La Niña with severe drought and high temperatures.

The first two weeks of April for the major corn and soybean producing provinces had 50% more rainfall than the five-year average. Some producers reported difficulties moving equipment due to excess water. The forecast clears up for most regions starting in the last week of April.

Rain continues to delay Argentina’s corn and soybean harvest, with 15.7 inches of rainfall in March. The Argentinian trade negotiation forum Rosario Board of Trade reported a 30% delay in corn harvest, with only 7% done, and only 3% of soybeans harvested, with average yields. The estimated soybean production in Argentina is 50 million metric tons; corn is estimated at 56 million metric tons.

CHINA

Abundant rains in April after a dry March boosted farmers’ confidence that second corn yields and production will be high this year, but China’s ample supplies could mean it will need less of Brazil’s corn. China may be poised to grow a record-large corn crop in 2024, besting the previous year’s record despite government incentives aimed at increasing plantings of soybeans at the expense of corn. That could keep Chinese corn supplies plentiful enough to further reduce reliance on U.S. corn exports, especially with a possible production rebound next year for Brazil, a relatively new corn supplier to China.

In its latest report, the U.S. Department of Agriculture’s Beijing office forecasts that Chinese corn output for the 2024-25 season will increase by 2.4% to a record 296 million metric tons, attributed to improved yields and higher plantings. That would make for a fourth consecutive record in Chinese corn production, which four years ago stood near 261 million tons.

Food security remains of top concern for China, and curbing dependence on imports is part of the strategy. China’s imported corn in 2023-24 is expected to account for 8% of domestic consumption versus 87% for soybeans, prompting increased farmer subsidies for soybeans versus corn in 2024-25.

Chinese farmers still expect higher profits for corn over soy, especially given the recent improvements in corn yields and the potential further growth offered by genetically engineered seeds (GE), only recently introduced. USDA estimates only 1.5% of China’s 2024-25 corn area will be under GE seeds, although that could reach as much as 15% within the next two years.

It is unclear whether further expansion in China’s corn crop will eventually ratchet down the country’s imports, which have been historically strong in the last four years despite the bumper crops. USDA’s attached projects 2024-25 Chinese corn imports at 20 million tons, down from 23 million this year.

Brazil has been China’s top corn supplier since Brazilian vessels first began arriving there in early 2023, pushing out U.S. exports, which had been hot since China started buying large volumes of U.S. corn in mid-2020.

The USDA’s Brasilia office forecasted a 6% increase in Brazilian corn production for the 2024-25 season compared to this year, driven by a return to normal yields and a slightly larger planting area. However, a smaller 2023-24 crop, most of which is still being grown, could keep Brazilian corn prices higher and favor rival exporters.

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