Global Market Outlook on Corn

  • Global supply of corn has been rising at a CAGR of 4.8 percent over a period of five years. Production in 2016-2017 is  estimated at 1387.36 MMT 
  • The key factors driving the growth include consecutive record production in the US and China and demand from end-use segments, such as feed and corn starch processing industries 

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  • With respect to corn processing end uses, the global sorbitol market is set to rise by a CAGR of 3.6 percent, while the corn  starch market could rise by a CAGR of 4.8 percent in the coming years. This is driving the increase in corn demand for the US and China Back to TOC
  • Corn prices are likely to be supported in the coming months. Thus, large buyers can choose fixed-price long-term contracts (>6 months) should negotiate the length of their contracts to 3-4 months to leverage on falling prices and achieve significant cost savings. Small and mid-sized buyers can use existing stocks and opt for spot buying from October onward 
  • Prices are expected to start increasing from December 2017 from its lowest point. This month could be the best price-lock period for longer contracts for the successive months 

Global Supply–Demand Analysis

  • Global production has risen by ~19.6 percent over a five year period as a response to the rise in demand by ~15.9 percent during the same period 
  • The major drivers of demand and supply are the end-use industries, such as corn starch and animal feed, with cheap corn prices being responsible for the rise in demand 
  • Over a five-year period, the global feed demand has risen by ~20.2 percent, chiefly driven by ample global harvests and falling corn prices 
  • The US and China are the top consumers because end-use segments are mainly concentrated in these countries 
  • With respect to the corn processing end-use segments, the global sorbitol market is set to rise by a CAGR of 3.6 percent, while the corn starch market could rise by a CAGR of 4.8 percent in the coming years. This is driving the increase in corn demand for the US and China 

Global Corn Trade Dynamics 

  • LATAM countries have traditionally been competitors of the US for exports, but the US is projected to increase its market share close to 40 percent, in 2016–2017, which would be nearly double that of the market share of LATAM 
  • Increase in the US’s export share is driven by a situation of a supply crunch in Brazil and export delays in Argentina

Corn Starch Supply–Demand Analysis

  • It is estimated that ~62.2 MMT of corn starch was produced in 2015. The major regions for corn starch production and the potential suppliers are the US, China, certain regions in the EU, and Asia (other than China)
  • The global starch production was ~85 MMT as of 2015. Out of this, 53 percent is used for starch sweeteners, of which, the major portion is corn based. 11 percent goes into modified starches and 36 percent into native starches, of which, 68 percent and ~50 percent are corn-based, respectively. It is inferred that the total amount of corn starch produced is ~62.2 MMT in 2015 
  • Corn starch is used in the manufacture of sweeteners and sorbitol. The US-based global companies, such as Cargill, Roquette, and ADM, among others, possess nearly 70 percent of the sorbitol market, and thus utilize corn starch