For the Quarter Ending September 2023


North America:

In the third quarter of 2023, Maize prices in North America, particularly in the United States, continued their downward trend. This decline was primarily driven by the increased availability of Maize resulting from ongoing harvests in major exporting countries, especially in the northern hemisphere. The U.S. faced challenges with its corn crops due to hot and dry conditions, particularly in the northern regions where the crop was still developing. Severe drought in the western half of the state, occurring as recently as late April, led to many farmers abandoning their crops. However, Maize prices saw a significant decline from their peak in late June during July. This drop was attributed to the onset of the harvesting season, aided by rains in July that facilitated crucial crop development, countering the early-season dry conditions and hot summer temperatures. Additionally, Brazil's significant harvest contributed to it surpassing the United States as the world's leading corn exporter. The surplus supply from Brazil reduced demand for U.S. corn exports, contributing to the overall decline in prices. Despite a strong domestic harvest that increased stocks, the market experienced a surplus of Maize supply, further pressuring prices. Moreover, the drop in American corn exports was linked to a decrease in purchases, adding to the factors influencing the decline in Maize prices during this period.

Asia Pacific:

Throughout the third quarter of 2023, Maize prices in the Asia-Pacific (APAC) region witnessed a continuous increase. Grain storage traders focused on selling their goods at higher prices, prompting downstream processing enterprises to raise prices to replenish their inventory. This trend was supported by a robust domestic corn market with an ample supply of high-quality surplus grain. Additionally, trading companies showed a keen interest in selling their products at premium prices, further contributing to the upward cost trajectory. However, the market faced challenges due to heavy rainfall in the northern region caused by a typhoon at the beginning of the month. This weather event led to a decline in the expected high yield of domestic corn, hindering the listing of new-season corn. As a result, high-quality and tradable grain sources gradually diminished from the domestic corn market, maintaining elevated prices in the northern regions. The arrival of corn at ports and downstream processing facilities decreased, prompting businesses to raise prices amid transportation disruptions caused by China's high temperatures and rainy weather. Despite these challenges, corn imports remained relatively low as merchants had sufficient inventories for the month. As September approached, early maturing Maize was identified, and the new maize crop was expected to reach the full harvest stage by the end of the month. The supply of old Maize decreased, and a considerable amount of spring corn was categorized as new corn in various regions, commanding higher prices than the previous year. Anticipated overall capacity growth was expected due to a marginal reduction in new-season maize production caused by weather conditions, coupled with an expansion in planting areas.

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Europe:

Maize prices in Europe displayed a fluctuating market sentiment throughout the third quarter of 2023. They experienced a significant decline in the initial half, followed by a rise in mid-August, only to plummet once more as Q3 concluded in September. July saw a notable drop in prices in Italy, leading to reduced consumption in both the food and industrial sectors. The situation worsened due to a recent inflation spike, increasing the production and transportation costs of guar gum, thereby further lowering maize prices. Domestic traders, holding substantial guar gum reserves, exacerbated the situation by reducing their price quotes as a strategic move to hedge against losses, thereby suppressing the market further. However, as August unfolded, maize prices experienced a 3% increase after a persistent downward trend. This uptick significantly impacted consumers and businesses in Italy, causing higher food inflation and straining household budgets, especially in the face of rising demand in the food industry. Additionally, the demand for corn surged due to its role as a crucial feedstock for producing ethanol, a biofuel blended with gasoline, to reduce emissions. Other influencing factors included weakening European exchange rates alongside these primary drivers. By the end of the third quarter in September 2023, prices declined once more, settling at $240/M.T. This decrease was attributed to the higher global supply of corn in 2023 compared to previous years, thanks to record harvests in several countries, including the United States, Brazil, and Argentina. This surplus supply exerted downward pressure on corn prices in Italy, one of the importing nations for corn.

South America:

During Q3 2023, the maize market in South America, particularly in Argentina, witnessed a continuous decline as prices steadily dropped. Throughout July 2023, maize prices steadily decreased, extending the downward trend that began in March 2023. The increased production in Argentina, a significant maize producer, resulted in a surplus supply among retailers, leading to further price reductions. Additionally, Argentina faced strong competition from other maize-exporting nations, such as the U.S. and Brazil, which produced larger maize quantities in 2023, making them dominant players in the global market. Brazil's more favorable climate for maize cultivation, characterized by warmer and drier conditions, contributed to driving down maize prices in the Argentine market, prompting efforts to destock inventories. The onset of the maize harvesting season in July reinforced the downward price trend, supported by the increased global corn supply, which kept prices declining. To counter inflation and boost production, the Argentine government implemented policies such as tightening monetary conditions and raising interest rates, driving prices lower. Moreover, the value of the Argentine Peso relative to the USD significantly decreased in August. Consequently, Argentina's corn stocks substantially rose, causing further price declines. The weak exchange rate of the Argentine currency against the U.S. dollar also elevated the costs of fertilizer imports necessary for the upcoming corn planting season. Due to the weakened global supply-demand dynamics, merchants in Argentina displayed reluctance to purchase feed, focusing instead on clearing their existing corn stocks.



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