Country News
Argentina: It is anticipated that farmers will sow less corn in the upcoming 2014/15 season should Argentina default on its sovereign debt, according to Reuters. Argentine farmers are heavily reliant on loans in order to fund planting each year, and a default would force interest rates to rise and have a negative impact on their ability to secure credit. Corn is already considered the most expensive crop to cultivate in Argentina.
Asia: Grain importers throughout Asia have reduced purchases in the hope that prices will drop even further than their already low levels, according to Reuters. While feed mills generally book cargoes three-to-four months in advance, many are now booking just two months in advance. It is feared that this action could have a negative impact on major grain exporters and could leave consumers vulnerable to supply disruptions, particularly in an El Nino year.
China: It seems likely that China will soon disband its reserve-based corn price support system in favor of transitioning to a market-based system that would allow supply and demand to decide crop prices, reports Reuters. The expectation is that markets will more efficiently streamline China’s food production chain compared to centralized control. Further on China: State corn sales have increased this week as the government sold 2 MMT (40 percent of the total volume offered) at an average price of $340-$360/MT.
Russia: The Ministry of Agriculture has advised that Russia should begin replenishing grain stocks with domestic purchases beginning in October, according to Reuters. This decision came following a meeting between the ministry and market participants including producers, unions and traders.
South Africa: Yellow corn for December delivery in Africa’s largest corn producing country fell by 4.9 percent and currently stands at $166.97/MT, reports Bloomberg News. South Africa is predicted to produce 13.9 MMT of corn this year, and so far around 7.5 MMT has been harvested.