Argentina's Corn Prices Plummeted by 31.23% YoY Amid Abundant Supply

In Argentina, corn prices experienced a YoY decrease of 31.23% in early Mar-24, with a 5% MoM decline. This decline is attributed to abundant corn supply in the market following recent rains, driving prices below the equilibrium point and leading to expectations of improved yields. Internationally, the corn market sentiment turned bearish after the USDA report revealed a surprising increase in supply from the US and Argentina, with a less significant decrease in Brazilian production than anticipated, contributing to further price declines.
The price of corn in Argentina has seen a significant year-over-year (YoY) decrease of 31.23% in early Mar-24, dropping to USD 0.18 per kilogram (kg) compared to USD 0.26/kg in the same period in 2023. Additionally, there was a 5% month-over-month (MoM) decline from USD 0.19/kg in Feb-24. This downward price trend has been consistent since Dec-23 when prices peaked at USD 0.35/kg. The decline in corn prices in Argentina is due to the abundance of corn supply in the market following recent rains, despite the challenging conditions during early sowing. Corn prices in Argentina have fallen below the equilibrium point due to expectations of improved yields due to the promised rains. Furthermore, the minimal amount of grain sold locally may lead to forced sales at harvest time, further impacting prices. Internationally, the sentiment in the corn market has turned bearish following the release of the United States Department of Agriculture (USDA) report. The report revealed a surprising increase in supply from both the United States (US) and Argentina, totaling an additional 3 million metric tons (mmt). Moreover, the decrease in Brazilian production was not as significant as expected, contributing to further price declines.