Maize (corn) price on the Chicago Board of Trade (CBOT) rose to $169.6/MT on 10th November 2020, reaching a 16-month high and up 3.8% on the previous day. The upsurge in prices is attributed to downward revisions made by the USDA on the November World Agricultural Supply and Demand Estimates (WASDE) report released on 10th November.
US 2020/21 maize production estimates were revised down by 5.5 million tonnes to 368.5 million tonnes, a drop of 1.5% compared to October figures. This is mainly due to lower yields forecast for this marketing year, despite maize crops reportedly being of better condition than previously anticipated.
While production numbers were revised down, estimates for export volumes were revised up significantly by 8.3 million to a record 67.3 million tonnes in 2020/21, up by 14% m-o-m and 49% in comparison to 2019/20. US maize export volumes are forecast to soar, mainly on increased sales to China, as the country continues to import record volumes due to domestic pig herd restoration. In addition, the US maize ending stocks projection was slashed by 21.5% to 43.2 million tonnes, the lowest in six years, hence supporting CBOT maize prices further.
China’s continued demand for grain and oilseed is likely to last in the short term, thus contributing to inflated maize prices for the remainder of 2020. However, the arrival of the new southern hemisphere crop in 2021 is likely to exert some downward pressure on US maize prices.