What to Expect from the Corn Market in Remain of 2023

Corn is one of the most important crops in the world, with a wide range of uses for food, feed, fuel, and industrial purposes. The global corn market reached a volume of 1,170.55 million metric tons in 2023, according to a report by Expert Market Research1. The market is expected to grow at a CAGR of 1.1% between 2024 and 2032, driven by factors such as population growth, rising incomes, increasing demand for animal protein, and expanding biofuel production.

?However, the corn market also faces several challenges and uncertainties that could affect its performance and outlook in 2023. Here are some of the key factors that could influence the corn market in the coming year:

Weather and production. Weather is always a major factor for crop production, especially for corn, which is sensitive to temperature and moisture conditions. In 2023, the corn market experienced two droughts that reduced yields and quality in some regions. The first drought occurred in late May and June, affecting parts of the U.S., Brazil, and Argentina. The second drought occurred in late August and September, affecting mainly the U.S. Corn Belt2. On the other hand, favorable weather conditions in July and August boosted pollination and grain fill in many areas2. The net result was a mixed picture of global corn production, with some countries increasing their output while others decreasing it. According to the USDA, global corn production in 2023/24 is estimated at 1,192.7 million metric tons, up 1.9% from 2022/233.Demand and consumption. Demand for corn is driven by various sectors, such as food, feed, ethanol, starch, sweeteners, and industrial uses. In 2023, demand for corn was supported by several factors, such as the recovery of the global economy from the COVID-19 pandemic, the expansion of renewable diesel and sustainable aviation fuel production, and the strong demand from China4. However, demand for corn also faced some headwinds, such as the decline of U.S. corn exports due to competition from other suppliers, the reduction of the U.S. beef cowherd that lowered feed demand, and the negative impact of macroeconomic factors on physical agricultural markets43. According to the USDA, global corn consumption in 2023/24 is projected at 1,201.8 million metric tons, up 2% from 2022/233.Prices and trade. Prices are determined by the interaction of supply and demand in the market, as well as other factors such as currency exchange rates, government policies, and market sentiments. In 2023, corn prices reached 10-year highs in some months due to tight supplies and strong demand4. However, prices also fluctuated significantly due to weather uncertainties, trade tensions, and macroeconomic factors43. According to Rabobank, the average corn price in 2023/24 is expected to be $5.50 per bushel (US No.2 Yellow), down from $6.00 per bushel in 2022/234. Trade is influenced by both supply and demand factors as well as trade policies and agreements. In 2023, global corn trade was affected by several factors such as China’s import demand (which was lower than expected), Brazil’s export potential (which was higher than expected), Argentina’s export restrictions (which were lifted in September), and the U.S.-Mexico-Canada Agreement (which was implemented in July)3. According to the USDA, global corn trade in 2023/24 is forecast at 184.8 million metric tons, up 0.5% from 2022/233.In conclusion, the corn market in 2023 was characterized by high volatility and uncertainty due to various factors affecting production, consumption, prices, and trade. The outlook for 2024 will depend on how these factors evolve and interact in the coming months.