Poor exports have been hurting the U.S. corn market, and that may continue as spring draws closer.
Jack Scoville, analyst with the Price Futures Group, said that led to price decline in the first week of March, despite competitive prices from the U.S.
“Prices from South America should now remain strong as countries there concentrate on soybean exports, so the U.S. has a chance now to see export demand improve,” Scoville said. “The next winter crop is going into the ground in good conditions, but it has been wet so the soybean harvest has been delayed and the corn planting is becoming delayed as well.”
The global corn market has been dominated by China purchasing any South American product surplus, Scoville said. That may be impacted by those planting delays.
“Brazil sources say that 20% of the winter crop could be planted outside of the ideal window so yields could be hurt in the end,” he said.
Soybeans, meanwhile, are seeing improving global demand, particularly in Brazil. Despite the troubles seen through the growing season in Argentina and Brazil, production potential is still considered strong.
“Weather is becoming less important now as the harvest is already underway in central and northern Brazil and will spread south soon,” Scoville said. “Argentine production ideas continue to drop with the drought as planting is delayed and the crops already in the ground are stressed.”
World supplies will be one of the main focuses traders made moves on after the WASDE report from March 8, Scoville said, particularly in wheat. With big wheat crops anticipated in Australia and Russia, it will not be a shock if weakness has continued in wheat.
“The problem remains demand as world supplies are not so large and U.S. inventories are lower as well,” Scoville said. “The demand for U.S. wheat in international markets has been a disappointment all year and has been hindered by low prices and aggressive offers from Russia.”