Grains Supply & Demand dynamics
Corn Production & Supply Dynamics
Global Production
Corn production saw a substantial increase in 2023/24 due to favorable conditions, especially in the US and Brazil. However, a slight decrease is anticipated for 2024/25. The total corn output for 2023/24 is forecasted at 1,200 mmt, with consumption at 1,210 mmt, leading to ending stocks of 280 mmt .
Demand Factors
The demand for corn is significantly influenced by its use in animal feed and ethanol production. The resurgence of the Chinese market for corn feed post-African swine fever has been a crucial factor in boosting demand.
Stock Exchange Insights
Futures Market
Corn futures on exchanges like CBOT have shown sensitivity to US planting reports and weather forecasts. Ethanol demand also plays a significant role in price movements, with higher oil prices generally supporting corn prices due to increased ethanol production.
Price Trends
Corn prices have been volatile, with recent highs driven by strong global demand and concerns over US crop conditions amid adverse weather forecasts.
Sugar Production & Supply Dynamics
Global Production
Sugar production is heavily influenced by biofuel policies, particularly in Brazil, a major sugarcane producer. For the 2023/24 season, sugar production is forecast to remain stable, though it is sensitive to climatic and policy changes.
Demand Factors
The demand for sugar is driven by both direct consumption and its use in ethanol production. Global biofuel mandates, especially in Brazil and India, are key demand drivers.
Stock Exchange Insights
Futures Market
Sugar futures on the Intercontinental Exchange (ICE) have been influenced by oil prices and biofuel policy changes. Higher oil prices tend to boost sugar prices due to increased ethanol production from sugarcane .
Price Trends
Recent trends show sugar prices fluctuating with the global energy market and weather conditions affecting major producers like Brazil and India.
Soybeans Production & Supply Dynamics
Global Production
Soybean production for 2023/24 is projected at a record 414 mmt, driven by high outputs from the US, Brazil, and Argentina. This is expected to continue into 2024/25. Consumption is estimated at 380 mmt, leading to higher ending stocks.
Demand Factors
The primary demand drivers are animal feed and oil. China, the largest importer of soybeans, has shown increased demand post-African swine fever. Trade policies, particularly between the US and China, also play a significant role.
Stock Exchange Insights
Futures Market
Soybean futures on CBOT reflect global demand dynamics, particularly from China. Tariffs and trade negotiations between the US and China significantly impact price movements.
Price Trends: Soybean prices have been buoyant, with highs driven by strong demand from China and concerns over South American crop yields amid adverse weather conditions.
