Market concerns over the coronavirus outbreak have been spilling over to grain markets, as the main exporters’ maize prices have been trending down since January 2020. Prices are being pressured by uncertainty over consumer demand, with China’s economy currently stagnant. A major rebound in prices is not expected in the short-term.
As of 4th March, the EU maize price (Euronext) was down 4.7% compared to the beginning of January, while the US maize (CBOT) price fell 3% during the same period.
In the Southern Hemisphere, Brazilian maize prices were 5.1% lower (March 4th) compared to the beginning of the year. However, prices are 26.4% higher than the same period last year following record exports in 2019, supported by weaker Brazilian currency, and a strong domestic demand for feedstock and ethanol use.
Brazilian farmers are currently planting the “safrinha” maize crop, as heavy rainfall across the main producing areas delayed sowing, with the crops being planted outside the ideal dates. This is likely to add some upward pressure to prices in the near term.