While world corn stocks were expected to be very large, the balance is easing under the effect of the situation in the United States, and prices have been recovering since August, now hovering around $150.39. However, volatility is likely to be high in the coming months.
Because if consumption is very dynamic at the global level, in particular because corn is the cheapest cereal for animal feed, strong fears weighed at the start of the campaign, given the 34 million hectares of corn to be harvested in the United States. However, 40% of this production is usually dedicated to ethanol, and this latter market is now very much in decline following the Covid-19 pandemic. In addition, yields were promising to be good, and the carryover stock was over 70 Mt.
However, the situation has eased since August: part of the Corn Belt has suffered from drought, Iowa, the main corn producing state, has had to deal with the passage of a storm that damaged three million hectares of corn, which reduced the US production potential. At the same time, Chinese demand is proving to be particularly dynamic: the Middle Kingdom imported between 15 and 20 Mt of corn this year, compared to the usual 4 Mt.
But the uncertainty of demand from China and the opacity of the country’s stocks are likely to contribute significantly to price volatility, as may the resumption of the Covid-19 pandemic. Other political (US elections) and climatic uncertainties, notably the La Nina phenomenon in South America, may also accentuate this volatility.
In Brazil, where corn is generally cultivated after soybeans and whose sole was important this year, the increase in area could reach 1 million hectares.
Despite the improvement in prices, "the economic results of corn farms remain disappointing with estimated turnover down 1.2% from the five-year average. All the more so as weather conditions affected yields.
Nevertheless, the limited availability in the Black Sea (Romania, Bulgaria, Ukraine), restores competitiveness to the export of French corn.