March 16, 2007

Strategie Grains: World 2007/08 corn market to remain tense

The world corn market will remain volatile in 2007/08, as an expected rise in production won't be enough to meet rising demand from the ethanol industry and the animal sector, Strategie Grains said Thursday (Mar 15).

This means there will be another reduction in year-end global corn stocks and prices will remain high, Strategie Grains' monthly analytical report said.

Except for Hungary, supply and demand of corn in the European Union for 2007/08 are set to be balanced, based on current crop forecasts, it said.

However, Strategie Grains added that the possible abolition of the EU's corn intervention system in 2007/08 would be bearish for domestic prices.

Currently, in the final months of the 2006/07 marketing year, Strategie Grains figures France's corn balance is at a slight deficit.

Hungary's corn balance still shows a surplus of 2.5 million tonnes, despite high exports, Strategie Grains said. The exports are preventing Hungarian corn prices from crashing, it added.