High temperatures and favorable conditions in the US Midwest mean that the grain corn and soybean harvest has started smoothly and is progressing rapidly. Despite positive reports on the export front, commodity prices are falling. In Europe the opposite is true. That is where grain maize is rising in price. How is this possible and will the price close to home also fall?
Pressure from the moving combines is being felt on the American futures market in Chicago. Corn is trading lower there on Monday, September 27. Soybeans do show green numbers. This has to do with new export orders. For example, it was announced on Monday afternoon that China has purchased 334.000 tons of soybeans from the new harvest, which strengthens the Americans.
A boost for soy prices
The soy market has actually gone through a somewhat negative period and could use this boost. Farmers hope for more of these messages so that the price can make further progress. The opposite is true with corn. Its price actually fell. Persistently dry and warm weather in the US allows the harvest to get started quickly and the crops to ripen more quickly. This is beneficial for getting good quality maize and beans into the silos.
The soy market is not completely free of concerns. For example, the Chinese government announced that 20 processing factories will be closed to save energy. Sky-high energy prices ensure that its consumption is restricted. This could have major consequences for the American soy sector, which once again hopes to export a huge amount.
European corn prices are rising
It is a bit unclear why the European price for grain maize is increasing. Last week, the November contract in Paris was able to make a significant step from €215,75 per tonne on Tuesday to €223,50 on Friday. On Monday afternoon the contract is still one euro higher. In the latest Mars report, the EU JRC assumes an average to slightly below average harvest. Less grain maize is estimated to be harvested, especially in Southern Europe. In France, Germany and Poland, a larger harvest is just around the corner. Unlike the last 3 years, the corn has not suffered from a lack of moisture this season. However, the harvest is very late due to the cool and wet weather. Drought and high temperatures in September have pushed the harvest dates forward somewhat.
Looking at the global balance sheet for grain corn, a 'bearish' view is appropriate. The US is heading for a record harvest after a relatively good growing season and enormous acreage. Argentina also expects to reap a record harvest. In Brazil, corn sowing is on schedule compared to previous years, despite drought. Sufficient rain has now fallen locally.
Solid bottom
But this corn still has to grow and anything can happen in a La Niña year. Moreover, the question remains what China will do and how much corn the country will import from North and South America. This depends on the own harvest and structure of the pig herd. However, the corn market remains supported by high wheat prices. This means there is a firm bottom in the market that will continue into the new year.
More grain corn
Closer to home in the Netherlands, Belgium and across the German border, it is likely that more grain maize will be harvested than has been the case in recent years. At that time, most dual-purpose varieties were chopped into the pit. With the current feed prices and ample availability of corn, it is again interesting to thresh corn for CCM or dry as grain. The Rotterdam feed maize quotation is currently almost €250 per tonne. Please note: this is still an old harvest. The price has therefore dropped considerably. In mid-August, the Rotterdam quotation was still €40 more per tonne. The price level remains historically high. The average price level over 4 years is €193 per tonne.