There Are Justifiable Reasons for the Drop in Corn Prices

The last week of November was quite calm for corn prices, with several ups and downs throughout the week. Therefore, the week ended as it began.

Due to weather conditions, there was considerable concern in South America regarding crop conditions. Subsequently, the quantities of ethanol decreased, resulting in a reduction in the amount of corn for processing.
Later, during the week, exports were lower than the industry expected.
Thus, taking into account both good and bad developments, the week ended as it began – with an almost unchanged corn price.

Experts share the opinion that there are justifiable reasons for a drop in corn prices in the coming weeks, and that all attention will be focused on the export of American corn and corn processing into ethanol, which will likely determine the price trend.
Of course, the situation in South America, which can change for better or worse, must not be overlooked. In a better scenario, there would be a drop in corn prices for the spring period of 2013, but in a worse scenario, the spot price of corn would increase as this would mean a sudden rise in demand for American corn.

As is the case with the export of all grains, FCA export prices are currently quite high due to concerns about the Mississippi River system and supply in NOLA, and they will decrease in the coming weeks due to very low water levels.
High export prices are also causing an increase in domestic prices in the U.S. as local buyers must pay to keep the supply of soy/soymeal off the export market.

This week, comments are emerging in the industry about the export of American soymeal, which could exceed the levels forecasted by the U.S. Department of Agriculture, potentially causing an increase in demand for soy for processing and increasing the supply of soybean oil. Thus, the price of soy and soymeal could rise, while the price of soybean oil could slightly decrease due to the increased supply.

For corn, last week was marked by a decline, and experts claim that this week could be similar. The U.S. Department of Agriculture will release its next World Agricultural Supply and Demand Report.
However, it is expected that this report will not bring major surprises – the majority of the industry believes that all negative changes for the year will be published in the January report, when the final production figures for grains will be released.

Overall, the market does not expect an exciting report from the U.S. Department of Agriculture. In the coming months, a major question regarding the corn market arises: will the export of American corn increase, and will exports ever reach the exciting levels forecasted by the U.S. Department of Agriculture?
If the Department of Agriculture adjusts export figures, it is not expected to be before January.

Throughout last week, the price of soy and soymeal rose, even with somewhat smaller fluctuations on Friday. Exports are rising more than anyone expected, and it seems that demand is not fading away. 
The price drop last Friday was likely caused by better weather forecasts for South America, and this, along with the lower corn price, favors a selling rather than a buying mood in the market.
However, looking at the situation for the next few weeks, it seems that the price of soy and soymeal should continue to rise in the short term. But in the long term, the price of soy and soymeal will be influenced by all weather conditions in South America.
Therefore, it is necessary to monitor the weather conditions in Brazil and Argentina.
As the price of soy and soymeal fell last Friday, buyers became more active as the lower prices seemed like a buying opportunity.