Miller Magazine Issue: 120 December 2019

97 MARKET ANALYSIS MILLER / DECEMBER 2019 South America and Ukraine continue their corn produc- tion growth, wheat will lose share in global grain demand – and wheat exporters will feel the competition in price. This will also negatively impact the paper market wheat prices. Furthermore, we cannot discard a depreciation in emerging- market currencies, leading to very competitive offers from Argentina, Russia, and Ukraine, with some key wheat buyers running down stocks. CORN In the US, the harvest is still ongoing in the northerly regions of the country, with an expected decrease in pro- duction from those states due to both a reduction in har- vested area and yields. In Canada, the harvest is wrapping up under variable conditions due to a lack of heat during the season and a late start, particularly in Ontario, the main producing province. More than 1 mln bu still not harvest- ed and covered by the first snow. In India, the sowing of Rabi corn is beginning under favorable conditions. In the EU, rainfall is hampering harvest in France and Germany in an already mixed condition season due to summer heat- waves. Rain makes harvesting delay. Over the last year, two disparate US corn narratives have competed for dom- inance. The first, championed by record-short speculators in April, expected US plantings to heavily favor corn over tariff-bruised soybeans; it further argued that US corn ex- ports were in terminal decline and in need of an ethanol or trade deal. As is often the case, objective truth was to be somewhere between the two extreme positions. US farm- ers attempted to plant the highest- ever corn acreage, but were stymied by flooded fields. US corn took a hit from the elements, but moderate supply issues were largely offset by falling export demand, courtesy of record harvests and weak currencies in LatAm. A clear example was last year’s record corn harvests and exports by heavyweights Brazil, Argentina, and Ukraine that have helped offset supply is- sues in the US. To be honest, I’m proud of my Ukrainian corn production forecast come true: production numbers are near 34-35. For next year, however, ongoing localized dryness in Brazil and Argentina presents salient risks for corn plantings and – combined with potential ethanol, tax, and feed increases – will reduce the export potential to the benefit of the US. The main fundamental factor which will drive market is ethanol production spatially in the USA and Brazil. Another one – in covering China’s meat demand. The corn in Argentina is rated 2.0% poor, 44.6% fair, 47.1% good, and 6.3% excellent. The corn rating this week is slightly better than last week. The soil mois- ture for the corn is rated 10.2% short to very short and 34.5% optimum to surplus, which is also a slight im- provement compared to last week. The corn is 72% in vegetative development and 7% pollinating. The Agri-