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US maize prices lower due to higher South American supplies

December 27, 2019

1 mins read

Strong competition from South American suppliers, especially Brazil and Argentina, caused the Mintec US maize price to trend down in November as demand shifted towards South American maize due to high availability. As a result, the average price for Q4 was 2% lower than the previous quarter. However, the average price is 2% higher than the previous year, supported by steep price increases during May and June as a result of extreme heavy rains delaying the sowing process. Similarly, prices rose rapidly in October (+9% m-o-m) supported by market uncertainty over the US crop quality and availability due to harvest delays caused by wet conditions.

The global 2019/20 maize production is expected to be 1.4% lower than the previous marketing year, at a total of 1.1 billion tonnes, driven by smaller crops for the main producing countries such as the US and Argentina. However, production is still anticipated 2.6% above the five-year average.

Brazil is projected to harvest a record crop in 2019/20, same as the 2018/19 season – a total of 101m tonnes and 16% above the five-year average, maintaining its position as the third-largest global maize producer. Argentinian maize production, on the other hand, is expected to fall slightly by 2% y-o-y in 2019/20, a result of drought conditions impacting crops, even though recent rain alleviated some of the threat. Despite a small reduction in production, Argentina is still forecast to reach near-record numbers of 50m tonnes, up 36% compared to the five-year average. Therefore, due to higher output, maize from these South American countries are likely to continue to remain attractive in the global market.

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Topics: Grains & Feed
Alana Barros
Alana Barros

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