Market Perspectives – November 1, 2018

Country News

Argentina: Lawmakers want to set the maximum export tax on corn at 12 percent. Because of the devalued peso, the current effective tax rate is 10 percent. Meanwhile, the government has rejected nearly a million tons of corn export licenses sought for sales just before the higher export tax went into effect, citing inadequate documentation or lack of grain on hand for actual export. Separately, the trucking association FETRA now expects talks to set new freight rates. (La Nacion; AgriCensus)

Australia: ABARES says the drought will reduce barley production by 17 percent to 6.9 MMT (AgriCensus)

Brazil: Matto Grosso has been the leading soybean producing state in Brazil but at current expansion rates, the ethanol association Sindacool expects corn to eclipse soy by 2022. Corn production in Matto Grosso will hit 30 MMT in 2018/1. Favorable rains allowed the early planting of soybeans so that the safrinha crop of corn to be planted in January 2019 is likely to benefit. However, there is concern that a weak El Nino could threaten this second crop. (AgriCensus)

Colombia: A growing economy is boosting meat demand and thus the amount of corn required. Corn consumption in 2018/19 will rise 200 KMT to 6.9 MMT. Of that amount, 5.2 MMT will need to be imported. (USDA/FAS/GAIN)

China: The National Grain Trade Centre says that auctions of state stored corn this year have surpassed 100 MMT. A recent auction sold nearly all of the 4 MMT offered and the average price was CNY1,581 ($227.50)/MT. (AgriCensus; NBC News)

South Africa: The Department of Agriculture, Forestry and Fisheries (SAGIS) says that the planted area to corn in 2019 will rise 5.6 percent to 2.45 million hectares. Market analysts had been expected a 7 percent increase. Conversely, USDA expects planted area will fall by 10 percent to 2.1 million hectares with corn production falling 11 percent to 13 MMT. (AgriCensus; USFA/FAS/GAIN)

Saudi Arabia: The government buying agency SAGO has issued an international tender for 1 MMT of feed barley. (Reuters)

South Korea: The feed company MFG bought corn from Glencore at $199/MT. (AgriCensus)

Ukraine: With the harvest 70 percent completed and yields exceptionally large, Ukrainian corn is at $159.50/MT, its lowest price in over a year. Favorable late season rains have pushed corn production to 38 MMT, nearly 10 MMT higher than the previous record set four years ago. Meanwhile, demand has been hurt by competition from the U.S. (S&P Global Platts; AgriCensus)