Corn Market: Losses Across the Atlantic Before the Weekend

The corn market faced losses on both sides of the Atlantic heading into the weekend, driven by a generally weak market environment. The March 2025 contract erased all its previous day's gains at Euronext, dropping 2.75 EUR to close at 210.00 EUR per ton. At the Chicago Board of Trade (CBoT), the March 2025 contract fell by 8.75 cents, ending the week at 450.75 cents per bushel (equivalent to 172.30 EUR per ton).

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Focus on South America

Recent reporting has focused on South American weather conditions:

• Brazil:
  • Most regions in Brazil continue to report good to favourable conditions.
• Argentina and Southern Brazil:
  • These areas have experienced increasing dryness recently, with forecasts indicating the drought may persist through mid-January.
  • Rising temperatures exacerbate the situation, particularly for early-planted crops, which require rain to sustain growth.
  • A two-week period without significant rainfall could cause plant stress, impacting corn and soybean crops.
  • 87% of the forecasted 6.6 million hectares of corn have been planted in Argentina.

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U.S. Developments

• Sales Activity:U.S. farmers have reportedly sold 55% of their corn harvest. Traders advise further sales to capitalize on recent price movements, citing a challenging market outlook due to the anticipated record harvests in South America.
• Historical Trends:A notable trend since 1990 shows that in 65% of cases, the final U.S. corn production figures are lower than the November estimates, while production increased in 35% of cases. This historical tendency could shape market sentiment.

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Summary

Adverse South American weather and record production expectations are challenging corn prices. U.S. farmers are leveraging current price signals for further sales, while traders remain cautious about the implications of potential logistical and weather-related disruptions in South America. The coming weeks will be critical in determining the direction of the market.

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