Chicago corn posted its biggest annual decline in a decade last week, while wheat and soybeans also posted large annual declines after a bumper harvest in Brazil and the resilience of the Black Sea** eased fears of weather and war.
Overall, the most active corn contract, CV1, is up 31% in 2023, the largest drop in the world's most traded commodity crop since 2013. This year, wheat WV1 is down 21%, while soybean SV1 is down 15%.
Grains and oilseeds will end several consecutive years of harvest setbacks, the coronavirus pandemic and the Russia-Ukraine conflict
Record corn harvests in Brazil and the United States this year, as well as record soybean production in Brazil, helped offset a severe drought in Argentina.
However, increased year-end rainfall in Argentina has allowed farmers to make good progress in planting the next crop of maize and soybeans.
Next year, farmers are likely to feel the impact and prioritize growing soybeans in the United States.
"In 2024, producers will be paying more attention to their input costs, and that's where pulses play a better role for them," said Mike Zuzolo, president of Global Commodity Analytics. ”。
Russia's large wheat exports have eased the grain market, and Russia has reaped another bumper harvest this year, with grain shipments from Ukraine resuming after Kyiv established a new shipping channel.
The USDA reported that export sales of U.S. soybeans were in line with expectations for the week ended Dec. 21. Wheat sales were close to the low end of expectations, while corn sales were close to the high end of expectations.
Traders are monitoring the state of Brazil's crop to see if recent rains and widespread showers next week can contain drought damage in the central and northern regions.
Analysts said that in 2024, the crop market could face a tightening due to adverse weather impacts associated with El Niño, export restrictions and higher biofuel requirements. If the effects of El Niño are not as severe as feared, farmers may struggle with mountains of corn.
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