Higher prices for grain maize in the United States have given the European market the opportunity to further increase in price. This is especially the case in the futures market. The maize harvest is starting late in Europe due to the weather conditions. Is a decrease plausible as soon as the combines start driving?
On the Matif futures market in Paris, grain corn rose from €225 per tonne on Monday to €236,50 on Friday. On Monday afternoon, October 4, the price corrects slightly again, with a price that is €0,75 lower. Wheat managed to make a profit again to €265,50. This leaves the search for a price ceiling. The first resistance is only at €300 per tonne. That level is still too far away for now.
More corn in the US
In the US, the most recent price increase did not go without a hitch. Initially the price actually fell. Combine harvesters are running and grain corn is being harvested throughout the Midwest, or the 'corn belt'. That puts pressure on prices. The 'quarterly grain stocks report' from the USDA Agriculture Ministry, published at the end of September, was not immediately positive regarding corn. Corn stocks came in at 31,4 million tons. Higher than traders' estimate of 29,3 million tonnes.
A price revival on the American CBoT futures market was mainly prompted by the enormous 'bullish' Numbers of wheat. What also helps are the sky-high prices on the energy market. Corn serves a dual purpose. In addition to raw material for feed and human consumption, ethanol is also extracted from it. The Americans have been strengthened by new export orders from China, despite the country itself having an excellent harvest this season.
European harvest delayed
Last week, 18% of US corn had been harvested. It is now estimated that this is almost a quarter. This means that the harvest is well ahead of last year. In Europe, threshing has largely yet to begin. In France, only 2% has been harvested, the agriculture ministry reports. A year earlier that was already more than 30%. The crops are considerably later than in other years and recent rain has not helped either. The harvest is also late in other European countries. The weather has so far been favorable to the harvest.
There is no physical quotation for grain maize in the Netherlands. The German price last week averaged €252,95 with a range of €240 to €280 per tonne. The price has actually fallen compared to the previous week by €7 per tonne. Because the harvest has yet to start, insiders expect that prices could decrease further this month. However, there is more interest in grain maize, partly because the trade in silage maize is hesitant. At current price levels it is very interesting to thresh corn or sell it as CCM.
High drying costs
What does not help are the sky-high fuel prices for gas and diesel. Since every ton of corn in Europe has to be dried, this is a significant expense. However, at current prices it is still interesting to thresh corn. KWS has one calculator where the costs and added or reduced value compared to silage maize can be calculated. This shows that the drying costs almost double.
In the Netherlands, grain maize does not amount to much. These usually concern dual-purpose varieties that have disappeared in the past three years. This fall will probably be different. Especially now that the sowing of catch crops has been given a month's respite, there is more room for the harvest that has yet to begin. An additional advantage is the large amount of corn straw, which is beneficial for the percentage of organic matter in the soil. A larger area of grain maize can also be expected next season, especially on sandy soil.
South America
Another important ingredient for the corn market is the harvest in South America. The yield has increased in Brazil. The USDA estimates 118 million tons for 2021-2022, while the country itself estimates 116 million tons. Thanks to the favorable market, arable farmers are sowing more corn. The main crop is currently being sown and this requires more rain. The 'second crop' after soybeans will be harvested at the end of this year. In Argentina, farmers are also experiencing dry conditions during sowing, although the situation is not unfavorable after recent rainfall.