In W42 in the maize (corn) landscape, the International Grains Council (IGC) estimates the global corn harvest at 1.22 billion metric tons (mt) in the 2023/24 season, 3 million metric tons (mmt) lower than the Sep-23 estimate. This decrease is primarily attributed to reduced forecasts for Brazil, the United States (US), and the European Union (EU), although China's estimates have slightly increased. Brazil's projection was revised downwards to 127.2 mmt from the Sep-23 estimate of 130.2 mmt, mainly due to reduced grain crop acreage as farmers shift towards soybeans. US corn production is expected to reach 382.7 mmt, a decrease from the Sep-23 projection of 384.4 mmt due to deteriorating crop conditions and yield prospects. This forecast is expected to influence corn prices, depending on the specific shift direction and region in the market.
Strategie Grains expects EU maize production to reach 60.6 mmt in the 2023/24 season. This estimate is approximately 1 mmt more than the Sep-23 estimate and 8.2 mmt higher than the drought-affected 2022/23 crop. This positive adjustment was driven by bountiful harvests in countries like France, Poland, and Germany, offsetting reduced yields in Bulgaria and Romania. Nonetheless, the current maize crop remains below the five-year average due to reduced cultivated areas, down by around 400 thousand hectares (ha). This situation highlights the delicate balance in the corn market, which is expected to require substantial imports this season, ultimately contributing to reduced prices.
The EU is expected to import approximately 20 mmt of maize, representing 25% of European consumption, the second-highest purchase behind China's 23 mmt shipments. The EU has imported around 4.8 mmt of maize this season up to October 8, primarily sourced from Ukraine (46%) and Brazil (42%). The top importing countries include Spain, Italy, the Netherlands, and Portugal. Corn prices have recently experienced a significant decline in the EU, predominantly influenced by developments in the global market and the pressure from the ongoing EU harvest, with corn futures falling below USD 212.33 per mt. Since the beginning of 2023, corn prices have decreased by roughly one-third in the EU.
Corn prices on the Chicago Stock Exchange (CBOT) saw a slight uptick during W42, reaching USD 5.05 per bushel on October 19. This indicates an increase from the USD 4.96 per bushel a week earlier and crossing the USD 5 per bushel threshold for the first time since July 31. Concurrently, the US corn harvest progressed well over the week, with 45% of the area already harvested by October 15, surpassing the historical average of 42% for the period. Of the remaining areas, 53% of the corn crops were in good to excellent condition, 29% were considered regular, and 18% were in poor to very poor condition. Corn shipments in the week ending October 12 totaled 434.47 thousand mt, slightly below market expectations. Nonetheless, the year-to-date (YTD) shipments have reached 3.9 mmt, a 19% year-on-year (YoY) increase. Multiple internal and external factors continue to influence the corn market, and investors are closely monitoring the evolving trends that will shape prices in the coming weeks.
Lastly, Tridge’s data analysis indicates that the farmgate price for Brazilian corn rose by 9% month-on-month (MoM) to USD 0.15 per kilogram (kg) in W3 of Oct-23. This price surge is linked to reduced corn planting by Brazilian farmers, driven by attractive soybean prices in the 2023/24 season. The National Supply Company (Conab) expects Brazil’s corn planting area to reach 21.2 million ha in 2023/24, a 5% YoY decrease compared to the 22.3 million ha in 2022/23. While Brazil has surpassed the US as the top global corn exporter in 2023, the reduction in corn planting areas may impact the global corn supply. The impact of the El Niño phenomenon throughout the growing cycle will be a significant factor influencing future corn prices.