Market Perspectives July 5, 2013

Country News

France: France’s southwestern corn producing regions endured unusual and persistent cold and wet weather throughout June, according to Bloomberg News. The region, which accounts for 30 percent of all French corn, has seen a 53 percent increase in average rainfall this year. As a result, the condition of corn in the Aquitaine and Midi-Pyrenees regions has deteriorated.

Further on France, 2012 farm income rose by some 9.4 percent, spurred mostly by a 20 percent jump in earnings for French grain farmers. Pretax income for growers of grains increased to an average of €72,800 from €49,300 in 2011 and €43,700 in 2010.

Nigeria: The World Bank has approved a $200 million loan for small-holder Nigerian farmers that produce sorghum and among other staples, reports Bloomberg News.

Additionally, Reuters reports that the Nigerian government is seeking to reinvest heavily into its agricultural sector in an effort to diversify the economy away from a complete reliance on oil exports. Corn and sorghum production have been rising steadily this year and foreign companies (including Cargill and Syngenta) are expected to invest heavily in Nigerian agricultural production and processing.

Russia: Russian farmers have sped up the grain harvest to try and mitigate damage from rain and hail in the Krasnodar region of southern Russia, according to Bloomberg News. Farmers harvested 8.5 MMT of grain (including 800,000 MT of barley) on July 1, compared to 4.9 MMT that time a year earlier, and the harvest is expected to be completed within the next week. Further, Russian exporter Rusagrotans has two vessels each carrying 60,000 MT of barley scheduled to leave this month destined for Saudi Arabia.

South Africa: Corn futures have gained this week due to market concerns about corn production and the country’s white corn supply, reports Bloomberg News. The price of white corn for December delivery rose by 1.1 percent to $231/MT, while yellow corn for September delivery rose 0.8 percent to $221.20/MT. South Africa’s Crop Estimates Committee indicated in a June 25 announcement that it expects corn totals to reach some 11.38 MMT, which is up from a May 23 forecast of 11.4 MMT.