The recovery in corn prices over the past two weeks seems to be slowing this week, with prices showing a nearly 1% drop at the start of the session. Under pressure from the favorable supply outlook from South America, the selling side may continue to dominate the corn market at the start of the week.

In Brazil, farmers in Mato Grosso have planted 97.81% of the expected second corn crop area as of March 8, higher than 96.44% at the same time last year and 95.91% historically. Contrary to previous market expectations, the planting of the second corn crop in Brazil was not delayed by the extended soybean harvest. Instead, the second corn crop was mostly planted within the ideal timeframe, with sowing activities nearing completion. This allows the crop to develop robustly before winter arrives, preventing yield reductions. The favorable crop outlook in Brazil’s largest second corn-producing state is expected to exert pressure on corn prices today.

In Argentina, the Rosario Grain Exchange (BCR) reported that as of March 6, 2024, Argentina has scheduled the export of 1.9 million tons of corn, the highest in at least five years. This is primarily due to remaining stocks from the 2022/23 season and a positive production outlook for the 2023/24 season. According to BCR data, Argentina's corn stocks on March 1, 2024 (the start of the 2023/24 season) stood at 9.6 million tons, 10% higher than the five-year average despite last season’s drought damage. Meanwhile, BCR forecasts Argentina will harvest a record 57 million tons of corn for the 2023/24 season. Furthermore, the USDA's March WASDE report also raised its production and export forecasts for Argentina’s 2023/24 corn crop by 1 million tons, to 56 and 42 million tons, respectively. With Argentina entering the 2023/24 season with abundant corn supplies, U.S. corn may face long-term competitive pressure.

The pressure from favorable crop prospects in South America will weigh on corn prices at the start of the week. According to Hanghoa247, corn prices are likely to continue weakening for the remainder of the session, potentially falling to around 429.

Source: MXV