If prices began to rebalance on Wednesday, recent days have seen a clear rebound in corn and soybean prices on the Chicago Stock Exchange.
Although closing on Tuesday with a very slight decline (-0.42%), the American yellow grain remained close to its highest levels for almost a year.
On the European market, corn closed Tuesday at nearly 216 euros per ton, up more than 2% in one week and at its highest since mid-October.
In parallel with American soya, rapeseed continued to progress on Euronext, approaching 540 euros per tonne: a very high level, favored by the rise in oil pricesthe fall of the euro against the dollar and the rise in the price of palm oil due to the drop in stocks in Asia.
On Friday, the United States Department of Agriculture (USDA) revised its estimates of the corn productionat 377.6 million tonnes (Mt) for 2024-25, or 7 Mt less than announced during the previous projection in December in its monthly Wasde report (World agricultural supply and demand estimates).
Estimates for US soybeans were also lowered by 2.58 million tonnes. Production is now estimated at 118.8 Mt.
Limited global corn supply
“(American) corn and soybeans appreciated due to the unexpected drop in (…) yields and production” after an end of the cycle marked by dry weather, according to Dewey Strickler, of Ag Watch Market Advisors.
“Psychologically, seeing the end-of-season corn stock in the United States displayed below 40 million tonnesit is a signal of tension, which reinforces the funds in their purchasing logic in Chicago,” noted Sébastien Poncelet, analyst at Argus Media France.
This tension is all the more visible as the world supply is relatively limited outside the United States, with the harvests of other major exporters not being expected immediately: we will have to wait until April for the Argentinian corn and until July for the most important Brazilian harvest, that of safrinha, he recalled.
But after the surprise, the effects of the Wasde report are beginning to dissipate. For Dewey Strickler, the market is beginning to understand “that corn stocks are still largely sufficient” and that “soybean supply is still in excess” at the global level.
Soy production is indeed expected to increase in Brazil. The Brazilian public institute Conab expects a production of 166.33 million tonnes, while the USDA, even more optimistic, puts forward the record figure of 169 Mt.
Regarding trade, US corn sales are still strong and the USDA confirmed on Tuesday the sale of 198,000 tonnes of US soybeans for delivery to China in 2024-2025.
Chinese caution
However, American analysts estimate that purchases from trading partners such as China, Japan or South Korea should decrease during the second part of the 2024-2025 campaign.
In its latest report, the USDA also “ decreased Chinese import figures 1 million tonnes for corn,” noted Damien Vercambre, from Inter-Courtage.
Furthermore, he wonders how to interpret the massive purchases of American soybeans by China in recent months: is this the “sign of a recovery” in consumption in China, or of “caution in anticipation of the arrival of Donald Trump » and a possible return of customs barriers ?
For Arlan Suderman, of the StoneX brokerage platform, the size of the soybean harvest expected in Brazil should lead to a drop in prices, with “the consequence that China will move its activities to Brazil, which it has already done started doing”.
According to him, China would have turned towards the Brazilian suppliescheaper than Americans due to exchange rates.
“Tariffs therefore do not matter, at least until stocks of the new Brazilian crop are exhausted at the end of the year and China must turn to (the United States) for supplement its supplies,” he believes.
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