After Steep Surge, US Corn Starch Prices Decline in June Amidst Low Demand

Corn Starch prices progressively increased across the USA region during the month of May. Corn Starch is a versatile ingredient used in a wide variety of products, from food to paper to textiles. Under the influence of several factors, including rising corn prices, increased demand for Corn Starch, and reduced supply of Corn Starch, has witnessed an optimistic prices trajectory.

Corn is the main raw material used to make Corn Starch, so when corn prices rise, so do Corn Starch prices. The increase in demand has put upward pressure on the prices of Corn Starch. The supply of Corn Starch has been reduced due to several factors that have contributed to the reduced supply and the increase in prices. Corn crops in the US Midwest have been facing weather challenges, including drought and flooding. This has led to lower yields and reduced production, further increasing the product's prices. Geopolitical tensions, such as the war in Ukraine, have also contributed to the increase in corn prices. The war has disrupted global agricultural trade, which has led to higher prices for corn and other commodities.

On the other hand, as June commenced, the prices of Corn Starch started to decrease. The demand for corn has been declining in recent months due to several factors, including the war in Ukraine. The war in Ukraine has disrupted global agricultural trade, which has led to lower demand for agricultural commodities from countries that rely on Ukraine for imports. Brazil and Argentina, the major exporter of corn, are expected to produce record corn crops in 2023. This increased supply from other countries puts downward pressure on corn prices in the United States. This increased production from Brazil and Argentina is putting downward pressure on corn and soybean prices in the United States, as it provides farmers with more options for selling their crops. These factors have led to a significant decrease in corn prices in the United States. Regarding increased corn production, the USDA has forecast that corn production in the United States will reach a record high of 15.7 billion bushels in 2023. This is due to favorable weather conditions and increased planting. In addition, farmers have planted more corn acres in 2023 than in any previous year.

According to ChemAnalyst, the prices of Corn Starch are likely to depreciate in the upcoming months due to consistent demand and enough inventories among the merchants. Also, the easy availability of feedstock Corn at a reasonable cost will likely keep the production cost for Corn Starch low, making the market situation favorable.