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Corn prices have currently dropped to a three-week low, but they are likely to rise this year on tight global supplies, analysts say.
“Despite trade uncertainties stemming from US President (Donald) Trump’s volatile tariff policies impacting market sentiment throughout Q1 2025, prices have regained upward momentum, driven by tight global supplies. We anticipate these tight supplies will continue through Q2 and into Q3 2024,” said research agency BMI, a unit of Fitch Solutions.
“Stocks (ending in 2025) have been lowered with a cut in China’s inventories due to lower imports, now pointing to a 6 per cent decline in global inventories below their opening levels,” said the Food and Agriculture Organisation’s Agricultural Market Information System (AMIS).
2.5% rise this year
Currently, corn futures on the Chicago Board of Trade (CBOT) are trading around $4.70 a bushel, down due to higher plantings in the US and the US-China trade dispute.
According to the US Department of Agriculture (USDA), global corn production is projected to be 1,215.09 million tonnes (mt) during the 2024-25 season to September — up from 1,229.76 mt in 2023-24. Consumption is projected at 1,241.78 mt — up from 1,219.76 mt a year ago. This will leave ending stocks at a multi-year low of 287.65 mt (314.33 mt).
“We have revised our 2025 average annual price forecast for second-month CBOT-listed corn, increasing it from $4.50/bushel to $4.60,” said BMI. Corn prices have gained nearly 2.5 per cent since the beginning of this year.
However, the World Bank, in its Commodity Outlook, said corn prices are expected to fall by 2 per cent in 2025 and 2026 due to lower crude oil prices — which reduce demand for ethanol and, thus, corn — and higher US-China trade tariffs.
Focus on US spring planting
ING Think, the economic and financial analysis wing of Dutch multinational financial services firm ING, said early forecasts suggested that despite a recovery in EU and Ukrainian corn production in the 2025-26 season, global corn stocks will likely edge down towards 290 mt next season due to lower US output (with yields returning to more normal levels) and global consumption growth.
“The market will be paying closer attention to 2025 spring planting prospects. And despite the broader weakness seen in the corn market this year, US farmers are expected to increase corn area for next season,” it said.
BMI said global corn production in the 2024-25 season is projected to reach 1,214 mt, marking a 1.2 per cent year-on-year decline. This decline has primarily been driven by a 3.2 per cent year-on-year decrease in US output, which is expected to total 377.6 mt, the same as the USDA.
2025-26 output at new peak
On the other hand, the research agency said global corn consumption inthe 2024-25 season will likely rise to 1,233 mt, marking a 0.8 per cent increase year-on-year. “This uptick in demand, coupled with a reduction in global output, is projected to shift the market from a production surplus of 4.9 mt in 2023-24 to a substantial deficit of 18.7 mt in 2024-25,” it said.
The International Grains Council said that on expectations of a bumper corn crop, grains production is projected at a new peak in 2025-26, seen 70 mt higher at 2,373 mt. With supply gains broadly matched by increases in consumption, end-season inventories are seen unchanged.
However, BMI said, the harvest of the US 2025-26 crop is expected to ease market tightness and cap price increases. US and Brazil ethanol policy, weather developments and escalation of trade tensions are the risks to the prospects of corn price, BMI said.
Published on May 1, 2025
This article first appeared on The Hindu Business Line
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