Source: Nhandan.vn
Photo: THX/TTXVN
The residue on the market pulls the “plump” corn price
Looking back in 2024, maize market The fluctuations are relatively struggling and ending the year with a slight decrease. The Vietnam Commodity Exchange (MXV) said, as of the end of July 2024, priced corn Transacted on the Chicago goods trading department (CBOT) plunged more than 20% compared to the beginning of the year. Notably, in the trading session on August 26, the price of maize has plunged to 361 cents/beach (142.12 USD/ton) – the lowest level since September 2020. However, then the price of this item quickly recovered strongly, almost deleted all the previous decline. This development shows the struggle and unpredictability of the market when the price is influenced by the supply and supply factors.
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On the supply side, global maize production is high, especially in the largest manufacturing countries in the world such as USA, Brazil and Argentina. According to data from the US Department of Agriculture (USDA), the total global corn production of the 2023-2024 crop reached 1.23 billion tons, an increase of 70,000 tons compared to the previous crop. Abundant supply has contributed to putting pressure on prices.
Meanwhile, on the side of the bridge, the corn market is also greatly influenced by the Chinese economic situation, the world’s leading maize import country. China’s economy in the past year continued to face difficulties due to prolonged real estate crisis and economic stagnation. This makes people tighten spending, reducing the demand for corn.
After the explosion of import at the end of 2023, China’s corn purchase activity gradually slowed down and at a low level last year. According to figures from China Customs, the country’s total imported corn volume in 2024 has reduced shock to more than 49% compared to the previous year, equivalent to 13.78 million tons of corn. In particular, Brazil is still the first choice due to low prices, followed by the US and Ukraine.
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However, Mexico, the largest American corn importer and is the third largest maize importer in the world that maintains a stable demand. This is a “bright spot” that helps the US corn export activities to recognize significant improvements in the last months of the year, thereby helping CBOT corn price to recover strongly.
Mr. Nguyen Ngoc Quynh, Deputy General Director of the Vietnam Commodity Exchange (MXV) said that the Ngo market in 2024 had experienced many fluctuations with the struggle between supply and supply factors. Although abundant supply from large production countries such as the US, Brazil and Argentina have put down the pressure of discount, the strong recovery of CBOT corn price at the end of the year shows the attraction from the stable needs of the main import markets such as Mexico. In the current context, the supply-supply, and trade policies will continue to be the key to deciding the trend of corn price in the near future.
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Mr. Nguyen Ngoc Quynh – Deputy General Director of Vietnam Commodity Exchange (MXV). |
How is the World World Market Picture?
After two years of weakening, the price of corn is giving many signals that will recover strongly this year. However, according to MXV’s forecast, the corn market will continue to fluctuate unpredictably due to the impact of both supply and supply, trade policies of countries and weather changes. In particular, Donald Trump was re -elected the US President and new tariff policies that could make major changes to the global commodity market.
US trade policy under President Trump
Right in the first week of power, the Trump administration enforced commitment to exercise by applying Import tax 25% on goods from Canada and Mexico, and 10% tax on China – a move is thought to resolve the Fentanyl crisis and the wave of illegal migration. Although the taxpayer for Mexico and Canada has temporarily retreated to March, this move of the White House will still have a significant impact on the market this year.
With Mexico, the partner imports more than 15 million tons of Ngo My every year, Trump’s taxation will worsen the relationship between the two countries. However, analysts said that Mexico could hardly give up the supply of Ngo My due to geographical advantages and stable quality. The transportation of maize from Brazil or Argentina to Mexico is twice the time and cost compared to from the US. This makes Mexico’s food and animal food processing factories difficult to find effective replacement sources.
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Meanwhile, China, the leading corn consumption market is facing difficult choices. If the United States escalated tensions, Beijing could impose retaliation for US agricultural products, thereby redirecting demand to Brazil and Argentina. This is invisible to reduce the diversification of Chinese supply. If the supply from South America is not as abundant as expected, China will be forced to consider carefully between food security and trade struggle with the United States.
The threat of La Nina’s return
The World Meteorological Organization (WMO) said that about 55% of La Nina weather will return to the end of February 2025, but it can also occur between February to April with the same ability of about 55%.
Normally in the years of La Nina, the crop in Brazil and Argentina will have to deal with many adverse weather types such as drought and frost. This is considered a “timer bomb” for global corn supply.
Typically in the past, in the period of 2020-2023, the price of maize has increased for three consecutive years, largely due to the impact of La Nina on South American supply. La Nina’s return increases the crop risk when this year for Ngo 2, the corn crop accounts for 70-75% of Brazil’s annual output, is expected to grow late due to the delayed soybean harvesting. Slowly planted corn will have higher probability of adverse weather at the end of the season. This may be a factor to help corn prices in 2025.
The transfer of the cultivated area in 2025 of the US
In 2025, it is expected to witness a strong disturbance in the US agricultural supply structure, when prices and trade policies become a decisive factor for land allocation between two main crops, corn and soybeans. Corn and soybeans are crops produced at the same time in the US and often compete for each other’s planting areas in the crop.
In 2024, the price of corn and soybeans decreased, but the decrease of soybean is much more than corn. Currently, the rate of Corn To Soybeans Price Ratio (soybean price ratio) of the US is much lower than 2.5 standard. That means growing corn is bringing higher profits than soybeans.
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According to the analysis of the S&P Global Commodity Insights, the 2025 -year -old corn crop area in the US is expected to increase 3.2 million samples, reaching 93.5 million samples. In contrast, soybeans continue to “lose land” when the estimated area decreases 4.3% (83.3 million samples). This reflects the expectation that the US corn supply will expand next year.
However, this expansion also poses a challenge of consumption. If exporting maize from the US to China and Mexico encountered obstacles, the excess supply could cause CBOT corn price to decrease sharply.
In the scenario of US export activities is not much influenced by Mr. Trump’s policy and crops in South America affected by bad weather, supply from the US will receive attention from the market, thereby promoting export activities.
Demand from China may be the decisive factor
Another factor that is expected to strongly affect the price next year is the demand from China. After a year of struggling with the domestic real estate and consumption crisis, China is trying to revive the economy through bold growth stimulating measures. If these measures are effective, the country’s maize demand is expected to increase significantly, creating a strong motivation for global maize prices.
China is a large market of maize imports, with the main demand from the livestock and ethanol production industry. In the context that the Chinese government is focusing on restoring production and domestic consumption, the demand for corn is expected to improve. However, the level of recovery depends on the effectiveness of economic policies as well as the situation of meat consumption and other livestock products.
The demand from China may be a key factor determining the direction of the maize price in 2025. However, specific developments still need to be closely monitored in the context of many fluctuations in the economy.
According to MXV, in 2025, it is expected to be a challenging year but also contains many opportunities for the global corn market. A large supply from the US and South America can continue to pressure the price reduction, especially if the Trump administration’s trade policies affect exports. However, the return of La Nina phenomenon and seasonal delay in South America can make a push for corn prices. In the context of global economic fluctuations, investors need to closely monitor the development of trade policies and crop output to be able to make accurate trading decisions.
