Corn and wheat prices were the center of attention last week on the Chicago Board of Trade. The prospect of higher global production and the recent drop in demand are putting pressure on prices.

US corn prices were under pressure last week. On December 13, 2023, the front date of December 24 closed at USD183.10/t, a loss of USD3.40/t weekly. The main deciding factor was that the USDA predicted high supply in its most recent report for the current 2023/24 season. Additionally, the USDA maintained its estimate for the Brazilian corn crop of 129 million tons, although the heat and drought in Brazil currently do not create good planting conditions. The soybean harvest, which precedes corn planting in many growing regions, is likely to be delayed due to the current situation, which will likely also affect the corn harvest. Brazilian authority Conab is assessing the situation more critically and currently expects a harvest of around 118.5 million tonnes.

Additionally, market participants evaluated the recent news coming out of China. According to the local statistics office, a record corn harvest was achieved in 2023, exceeding the previous year's result by another 4%. This would raise the corn harvest in the Middle Kingdom to 288.8 million tonnes. The main decisive factor was a significant expansion of the area, which more than compensated for the damage caused by typhoons throughout the season. After the EU, China is the world's largest importer of corn. Greater domestic production could curb demand in the global market.

After the bull market of the previous weeks, US wheat prices came under pressure in recent trading days. In one week, the front date of December 23 lost the equivalent of USD11.53/t and closed on December 13, 2023 at USD218.90/t. Follow-up appointments were also not spared and decreased significantly. Before last weekend, speculators had already closed their positions and pocketed profits, weighing on prices. The previous week, extensive US sales to China caused a spike in prices and pushed them higher.

Additionally, US prices fell significantly in the wake of recently weaker Paris prices. These had lost momentum after it emerged that in Algeria's latest major wheat tenders, most of it was likely to come from the Black Sea region and western European origins might receive less attention.