Global corn prices are expected to face downward pressure due to excess supplies and weak demand, leading to higher ending stocks. Currently at a three-year low, these prices may benefit Indian sectors like poultry and starch manufacturers, considering a surge in domestic corn rates. The Chicago Board of Trade shows corn March contracts at $4.45 a bushel, the lowest in three years. Rising freight costs have impacted corn prices in India, prompting calls for duty-free imports by the poultry and starch industry. However, the government is unlikely to consider this, given the existing tariff quota regime allowing concessional duty on five lakh tonnes of corn.
The bearish forecast anticipates a return to a net surplus position of 40.1 million tonnes in the world corn market for 2023-24. Various global agencies, including BMI and the International Grains Council, project increased total grains production. The US Department of Agriculture notes a rise in global corn production, with the US, China, India, and Paraguay contributing to the increase. Speculators remain pessimistic about corn prices, and the USDA lowers the season-average farm price to $4.80 a bushel. Despite increased use for feed, global carryover stocks are forecasted to rise, impacting trade dynamics. Regional factors like El Nino and geopolitical events, such as an escalation in the Israel-Hamas conflict, could introduce short-term risks. Long-term risks include increased corn-based ethanol production in Brazil. Overall, the corn market faces challenges with excess supply, influencing prices and trade forecasts.
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