At the beginning of 2023, a shortage of corn is expected on global markets

Market participants expect a shortage of corn in the first quarter of 2023. This will be affected by a reduction in supplies in Brazil, a weak harvest in Argentina and a slow pace of supplies from Ukraine.

Shipments from Brazil reached 33.7 million tonnes from March to November 2022. At the same time, the USDA pegged corn exports to Brazil at 44.5 million tons for the current marketing year. Because of this and taking into account the volumes shipped, in December-February it is expected that Brazil will have only 10.8 million tons of corn for export, according to the analytical publication Argus Media.

Argentina, which has already shipped 30.5 million tons of corn this marketing year, has about 6 million tons of export stocks through February to meet the USDA forecast.

Analysts believe that much of this volume could be carried over to the 2022-23 marketing year to compensate for a possible delay and smaller harvest next season, with the recent extension of export licenses to 2021-22 further facilitating the carryover.

So, according to market participants, only 2 million tons of corn can be shipped by Argentina by the end of this season.

“Ukraine, another major corn supplier, is facing increasingly difficult export conditions as slow vessel inspections in the Black Sea and domestic power outages affect the pace of shipments. And while significant old-crop stocks in the country have provided some support to corn supplies, the volumes carried over from 2021-22 are declining and not being fully replaced by the new crop,” the analysts wrote.

Currently, Ukrainian farmers harvested only 21.4 million tons of corn for the 2022-23 season, which is approximately 14.0 million tons less than last year.

The USA, which exported only 8.2 million tons during September-December, can ease the situation. Because according to the USDA forecast for 2022-2023, 51.7 million tons were expected.

“At the current pace, the export of corn from the USA will amount to 9.3 million tons by the end of December, which means a potential shipment of 43.4 million tons from January to August. At the same time, genetically modified corn in the US may turn away potential buyers, especially in Europe,” analysts believe.