Corn prices continue to struggle to find support in the current market environment domestically. But factors outside U.S. borders could help buoy prices. One of those factors is Spain’s increasing appetite for Ukraine corn.
According to a S&P Global report, Spain “showed robust demand for Ukrainian corn in the current marketing year 2023-24 (October-September), as the country’s import of Ukrainian corn was up 68% in the first six months of MY 2023-24 from the volume imported in the same period of MY 2022-23.” Spain maintains its status as the top corn importer in Europe behind strong feed demand. That’s what’s driving Ukraine corn prices higher.
Whether that has a spillover effect for corn prices globally remains to be seen as various forces are affecting crop production. In the meantime, investors who want corn exposure can look to the Teucrium Corn Fund (CORN ). For the short-term trader, it’s an opportunity to buy any price dips. For the longer-term investor, it offers a way to diversify their portfolios with agricultural commodities.
CORN tracks three futures contracts for corn traded on the Chicago Board of Trade. It includes 35% second-to-expire contracts, 30% third-to-expire contracts, and 35% December following the third to expire. The various contract exposures help the fund limit the negative effects of rolling contracts. That’s especially true during a market in contango.
Colder Weather Tames Leafhopper Infestation
Another top corn producer, Argentina, could see its supply bolstered thanks to colder weather. The country was plagued by a leafhopper infestation that could have potentially disrupted corn production supply. Argentina is the second largest corn producer, so a leafhopper infestation could have put a sizable dent in production, thereby pushing corn prices higher.
Because of the outbreak, the Rosario exchange — where corn is traded in Argentina — lowered its forecast for production by 20% according to an Agriculture report. Still, that extreme cold could affect production negatively alongside killing off a great deal of the leafhopper population in the process.
“Low temperatures spread not only in the center of the country but also to the north,” the Rosario exchange noted in a market report. “In these areas, temperatures below 4 degrees Celsius (39.2 degrees Fahrenheit) were recorded, with frost in several places.”
“Below-zero temperatures and frost help reduce the presence of this pest,” the exchange said of the infestation.
For more news, information, and analysis, visit the Commodities Channel.
