Maize Prices Fall Across the Globe as Downstream Demand Plummet

Global Maize (Corn) prices ended the second quarter of 2023 in a downward trend, which was accompanied by a significant decline in global demand and a slowdown in production momentum. Declines in crop prices fueled the gloomy market sentiments this month. Producers in both the region- the United States and Europe, one of the major Maize exporters, are feeling the pinch from declining crop prices, which has decreased their hopes for robust financial performance in the coming months.

Furthermore, several states, mostly in the Missouri River Basin, are still in a drought despite improvements in some areas. According to the U.S. Drought Monitor, as of May 16, more than 21% of the region was experiencing some degree of drought (moderate to exceptional), with Kansas and Nebraska experiencing the worst drought conditions. The Food and Agriculture Organization's food price index, which measures changes in a basket of food commodities' monthly international prices, averaged 124.3 points in May, down 2.6% from April, as per the agency. The decrease in May was supported by sizable drops in the price indices for cereals, vegetable oils, and dairy, which were partially offset by increases in the price indices for sugar and meat.

The effects of mild winter conditions include Wheat, Maize conditions and crop losses, a lack of topsoil moisture for planting and germination, poor pasture conditions and low stock ponds, water restrictions in local governments, and wildfires in eastern Nebraska. The forecast indicates a chance for above-normal temperatures across the entire north central U.S. from May 25 to May 31. Furthermore, the U.S. Department of Agriculture predicted that Maize-ending stocks would be excessive in 2023–2024 and continues to say, "It appears we are returning to the situation where Maize supplies will once more be readily available within the market owing to higher supplies and lessen inquiries ." Weak export demand for American supplies is putting additional pressure on Maize. In anticipation of a fresh harvest and due to weak demand from international importers, analysts reported that Russian Maize export prices are softening even more.

According to ChemAnalyst, " In the upcoming months, the price of Maize is anticipated to remain on the lower side. Also, persistent declines in inquiries for Maize across the local and overseas markets will support the supplies available to merchants and retailers. Trade activity in the international market is anticipated to increase in the coming months, particularly from China to the USA and Germany.