Corn Fell as Production in Brazil Ramped Up

Corn fell in Friday’s trading session as data from Brazil’s Companhia Nacional de Abastecimento expects the country’s production to jump.

The US corn contract for March delivery was trading lower by 0.55% to $656.38 per metric ton on December 02.

This fall came as CONAB projected a 12% production jump in the world’s second-largest corn exporter.

Furthermore, the agency expects the country’s exports to soar by 5.60% yearly to 47.00 million tons.

Additionally, the transport price of the commodity fell due to a strong US dollar, resulting from the Fed’s hiked interest rates this year.

Meanwhile, the war between Russia and Ukraine forced some countries to search for new corn suppliers.

In light of this, Brazil has replaced Kyiv as the European Union’s largest corn supplier.

This year, the EU bought 7.40 million tons of the commodity, 57.00% of which came from the world’s second-largest exporter.

At the same time, China’s customs officials approved the export of the Brazilian crop.

The rising demand for the commodity due to livestock feed needs largely drove this move.

Weather conditions in the world’s second-largest corn exporter favor the crops despite the early growing season.

However, Weather forecasters noted a 76.00% chance of a La Niña weather pattern in February.

In addition, such climate condition has a 40.00% chance of persisting until April, which could hurt the crops.

USGC Predicts Dull Corn Demand

US Grain Council forecasted a dull corn demand in Asia next year due to slow economic growth that would limit consumers’ purchasing powers.

Also, the agency warned that a recession would further push commodities prices down once a recession starts.

On the other hand, the United States found competition in Brazil after China allowed its corn to enter their country.

In the 2022-2023 crop season, China bought less of the commodity from the US compared to the previous season.

According to the US Department of Agriculture, corn sales were 5.43 million metric tons as of November 17.

This amount was below its record from a year ago of 8.71 million tons.