Recently, global analysts have been focusing heavily on the weather in South America, which they believe will be a key factor for global corn and oilseed markets. What are the current expectations and what will the potential risks be going forward?

Following last season's extreme drought in Argentina, the country's 2023/24 maize crop is expected to grow significantly. In the USDA's latest World Agricultural Supply and Demand (WASDE) forecasts, Argentina's corn production this season is pegged at 55 million tonnes, up 57% year-on-year and 15% over the five-year average.

The Buenos Aires Grains Exchange was even more optimistic, reporting 56.5 million tonnes, up 66% from its estimate of 34 million tonnes for 2022/23. As of February 21, 28% of the corn crop was rated in good/excellent condition, compared to just 9% a year earlier. However, drought still remains a problem for parts of Argentina, with later-sown maize yields likely to be affected.

In Brazil, the USDA forecast this season's corn production at 124 million tons, down 9 percent from the year but 14 percent above the five-year average.

Forecasts are mixed, however, with Conab estimating total corn production in Brazil at around 114 million tonnes, down 14% year-on-year. These forecasts were made at the beginning of the month, but dynamics in climate, vegetation and political events may lead to revisions in the upcoming forecasts.