Corn Market: Steady at Euronext, Gains at CBoT

Corn prices at the Euronext traded sideways on Monday, with minimal movement. The March 2025 contract slipped by 0.25 EUR, closing at 209.75 EUR per ton, indicating calm market activity. In contrast, corn at the Chicago Board of Trade (CBoT) recovered a significant portion of Friday's losses, driven by a slightly weaker U.S. dollar. A 7-cent increase pushed the March 2025 contract to 457.75 cents per bushel (equivalent to 172.84 EUR per ton).

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Weather Concerns for Argentine Corn

Weather is becoming an increasing concern for Argentine corn crops:

• Rainfall in late 2024 was sufficient, but forecasts predict drier conditions through mid-January and rising temperatures.
• For instance, the Santa Fe region in northeastern Argentina received only 35 litres per square meter of rain in December, just one-third of the average for recent years (110 litres per square meter).
• Argentina, the world’s third-largest corn exporter, is closely watched, as prolonged dryness could stress crops and impact global supply.

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U.S. Export Inspections

The U.S. Export Inspections report for the week ending January 2 showed:

• Inspections totalled 847,000 tons, down 6.6% from the previous week and 22% lower than last year.
• Mexico was the largest recipient.
• Since the start of the season, 16.2 million tons have been exported, a 25% increase over the previous year.

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Fertilizer Market in China

In China, urea futures have fallen to their lowest level in over a year:

• Urea prices dropped 12% in 2024, ending a four-year rally, primarily due to an oversupply and declining export volumes.
• Production capacity increased by 4 million tons while exports declined.

Regulatory Changes:

• From January 1, China adjusted export duties on small-package fertilizers (under 10kg) from "per unit weight" to "per packaging weight."
• This change targets fertilizers like urea, ammonium phosphate, potassium chloride, and potassium sulfate, potentially further limiting exports.
• Small-package fertilizer exports surged 50% last year to 500,000 tons as exporters used smaller packaging to circumvent restrictions.

Overproduction, declining agricultural commodity prices, reduced exports, and growing inventories will keep fertilizer prices under pressure in 2024.

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Summary

While Euronext corn remains steady, CBoT prices recovered, partially supported by currency shifts. Weather concerns in South America, particularly in Argentina, and softer U.S. export performance complicate the market outlook. Meanwhile, China’s fertilizer market struggles with oversupply and tightening export rules, further pressuring global input costs for agriculture.

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