Corn price has recorded an eight-year surge in the past one year to $7.56 per bushel. According to the US Census Bureau, corn exports have rapidly increased from $2.2 billion to $5.5 billion.
Weather is a vital determinant when dealing with most grains most especially corn. Corn price has remained unaltered throughout the last year due to the crop’s growing market. Brazil’s scorching sun continues to heavily hurt crop yields.
Brazil’s corn output has lowered by almost 8%. Many market analysts have termed Brazil’s current situation to be critical. This has brought a strain in the global balance sheet. The U.S has now been left with no choice but to compensate for the dip in South American’s exports.
In a bid for compensation, corn prices have been largely increased to recover the lost input. This has also made a huge impact on commodity prices most especially those that use corn as a raw material.
Corn prices have remained firm due to the grain’s large demand. The rise in domestic corn prices has led to China purchasing large amounts of corn from US which is quite unusual. This is since China was not a major importer of corn from the US.
USDA outlined that corn stocks in 2020-2021 recorded a low of 1.352 billion bushels. This is the lowest after 2013. Global corn stocks have also been declining from 302.9 million mt last year to 283.85 million mt.
However, there is still a ray of sunshine as China embarks on large purchases. This will be a major upward push to the global prices of corn. With the continuous Chinese demands for corn, the global corn balance sheet could be saved from shrinking further.
I think that the rising corn demand together with the drought in Brazil, this grain prices will continue rising as commodity prices upsurge.