US maize (corn) prices on the Chicago Board of Trade (CBOT) fell to $126.02/MT on 4th August from the peak of $141.9/MT on 1st July due to continued bearish sentiment as a result of ample expected supply. This represents a significant drop of 11.2%.
According to the USDA, China bought a record 1.76 million tonnes of maize in July, the third largest sale on record. As a result, the monthly July average price was up 2.4% m-o-m fuelled by China’s buying of US maize amid weather concerns across the Corn Belt and the weakening of the US dollar which encouraged export demand.
However, even with strong demand, the maize market is still bearish. Recent rainfalls in the drought-stricken areas of the Corn Belt helped to ease market concerns over total maize yield, adding further pressure to already low maize prices. Despite the USDA in July revising the US maize production down by 6.2% compared to their previous forecast in May, US total maize production for 2020/21 is still projected to rise significantly by 10.2% y-o-y to 381 million tonnes.
The weaker US dollar is likely to make US maize more attractive in the global market, thus spurring foreign demand. However, as the country is expected to benefit from ample supply, maize prices are likely to continue to be pressured over the next couple of months.