The global grain market is facing oversupply, putting pressure on corn and wheat prices.

The latest Hedgepoint report on corn and wheat markets indicates a global scenario of abundant supply and stable prices. International macroeconomic instability, influenced by geopolitical tensions, monetary adjustments, and slowing demand, has contained any more consistent reaction in agricultural commodity prices, even in the face of specific factors that could support prices.

Photos: Jaelson Lucas

In the case of corn, the United States leads with a record harvest estimated at 427 million tons, supporting robust exports and competitive prices. China, in turn, shows a significant drop in the stock-to-use ratio, which could boost additional imports if trade conditions become favorable.

Brazil, however, faces challenges in reaching its export target, particularly due to the growth in domestic demand for corn ethanol, which has helped absorb some of the local supply, according to Thaís Italiani, Market Intelligence Manager for Grains & Oilseeds at Hedgepoint Global Markets.

In Argentina, the increase in cultivated area and the temporary reduction of export taxes stimulated intense sales, with export potential of up to 37 million tons. "This movement, combined with the competitiveness of the US, puts pressure on the Brazilian export market," says Luiz Fernando Roque, coordinator of Grain & Oilseed Market Intelligence at Hedgepoint Global Markets.

Wheat

In the wheat market, the European Union is showing a significant production recovery, with an estimated 140 million tons and a drop in imports. Russia, with virtually zero export taxes, is reinforcing downward pressure on global prices. Ukraine, still affected by the war, maintains a restricted supply, while Argentina is starting its harvest with good conditions and expectations of exporting up to 13 million tons, a large part of which is destined for Brazil.

According to Roque, the corn and wheat price index remains under pressure, reflecting ample supply and fierce competition among the main global players. "The expectation is for a neutral to slightly bearish bias in the coming weeks, with possible upward movements conditioned by weather events, such as the return of La Niña, or adjustments in official productivity data, especially in the US," he says.