El Niño squeezes India’s kharif corn while EU feed prices firm

Madhya Pradesh’s strong maize expansion is only partly offsetting sharp acreage losses in drought‑hit Karnataka and Maharashtra, leaving India’s 2026 kharif corn area about 5% below last year and pointing to a tighter domestic supply balance. This is already feeding through into a firmer global feed complex, with EU cash corn prices edging higher as buyers start to price in delayed Indian arrivals and higher import needs later in the season. India’s kharif corn season is being reshaped by a difficult monsoon start and emerging El Niño conditions. National maize acreage has slipped to around 6.79 million hectares by 17 July, despite a 23% surge in Madhya Pradesh plantings. Deep cuts in Karnataka and smaller declines in Maharashtra, Rajasthan, Telangana and Uttar Pradesh reflect rainfall shortfalls and a narrowing sowing window. Feed and ethanol users now face a more uncertain supply outlook, with arrivals likely delayed to around December and competition from soybeans for farmer attention increasing.

Prices

European feed corn prices are firming moderately in July. In Germany (Drentwede, EXW), feed grade corn has risen from about EUR 0.241/kg in late June to roughly EUR 0.268/kg on 23 July, a gain of around 11% over four weeks. French FOB corn around Paris is holding near EUR 0.25/kg, slightly below early‑month levels but still underpinned by wider grain strength and weather risk in key origins. Ukrainian CPT and FOB offers remain discounted, but values have also inched up from early‑July lows as Black Sea logistics and weather risks are repriced.

Supply & Demand

India’s total maize area is estimated near 6.789 million hectares as of 17 July, about 5% below last year’s 7.15 million hectares. Within this, Madhya Pradesh has expanded sharply to roughly 2.337 million hectares from 1.9 million, confirming a strong regional shift toward maize where soil moisture and water availability are relatively better. This expansion, however, cannot fully compensate for weather‑driven losses in other key producing states.

Karnataka’s maize area has plunged by nearly 30% to around 943,000 hectares, while Maharashtra has slipped by about 5.1% to approximately 959,000 hectares. Smaller acreage declines in Rajasthan, Telangana and Uttar Pradesh further tighten the outlook, with only Andhra Pradesh and Bihar showing marginal gains. Industry participants largely attribute this pattern to rainfall deficits linked to El Niño and to a narrowing sowing window, especially in rain‑fed southern and western belts where replanting options are limited.

Despite these challenges, maize still looks attractive to many Indian farmers due to comparatively favourable price levels against other crops. Yet memories of last season, when maize traded below the government support price while soybeans strengthened, are encouraging some growers to diversify into oilseeds. This potential shift caps any late rebound in maize area and raises the risk of tighter supplies for the livestock sector in 2026/27 if yields also suffer from moisture stress.

Fundamentals & Sector View

The livestock‑feed industry in India is bracing for a difficult year. Delayed sowing and patchy crop conditions imply that new crop arrivals may be postponed by roughly one month, with larger inflows not expected until around December. This creates a prolonged gap where poultry and cattle feed mills may need to rely more heavily on old crop stocks or imports at potentially higher prices. Fourteen poultry associations have responded by jointly funding a digital field survey of maize and soybeans to generate independent production estimates and manage procurement risk.

The ethanol sector is relatively less pessimistic. Stakeholders highlight that maize is less water‑intensive than some competing crops and that conditions remain comparatively stable in Madhya Pradesh, Chhattisgarh and Telangana. For them, the main concern is not immediate physical availability but the cost of securing forward supplies if domestic prices rise in response to feed demand and weather‑driven yield uncertainty. In this context, robust sowing in central India could ensure that industrial users are not completely crowded out, even if margins tighten.

Globally, El Niño‑related monsoon variability is reinforcing a risk premium across coarse grains. India has experienced one of its driest Junes in over a decade and July rainfall remains uneven, with meteorological agencies warning of below‑normal precipitation in core monsoon months and analysts flagging maize as particularly vulnerable if deficits persist. Together with ongoing logistical and geopolitical uncertainties in the Black Sea, this underpins current firmness in EU feed corn, even as Ukraine continues to offer competitively priced volumes into Europe.

Weather & Monsoon Outlook (India focus)

India’s 2026 southwest monsoon has so far been characterized by a very weak June followed by a partial recovery and then renewed dryness in July. National rainfall deficits of around 30–40% in June have been trimmed but not fully erased, and more than half of India’s districts have recently recorded deficient to large‑deficit rainfall. Forecasts point to an overall below‑normal July–September rainy season as El Niño strengthens, implying elevated risk for rain‑fed kharif maize in Karnataka, Maharashtra and parts of central India.

For maize specifically, this means increased downside risk to yield potential in already acreage‑hit regions, while relatively better‑watered states like Madhya Pradesh and Chhattisgarh will need consistently adequate follow‑up rains to safeguard their expanded plantings. Prolonged dry spells or heat waves during pollination and grain filling could materially reduce output, amplifying the impact of the current 5% area loss at the national level.

Trading Outlook (30–90 days)

• EU feed buyers: Consider covering a higher share of Q4 corn needs on current dips, but maintain some flexibility via optional origins (EU/Black Sea) given still‑ample Ukrainian offers and uncertain yield outcomes in Europe and the Black Sea.
• Indian feed users (poultry, cattle, aqua): Advance procurement for October–January is advisable, including strategic stock‑building in August–September, as delayed arrivals and a smaller kharif crop could tighten spot availability and lift basis levels into Q4.
• Ethanol producers: Lock in a portion of maize requirements from surplus regions such as Madhya Pradesh and Chhattisgarh via forward contracts, while keeping some exposure open to benefit if global prices soften on Northern Hemisphere harvest pressure.
• Producers in India: Where agronomically feasible, maintain maize acreage under irrigation or assured rainfall; diversified maize–soybean rotations may reduce income risk but could tighten local feed grain supply if soybeans continue to outperform on price.

3‑Day Regional Price Indication (Directional)

• Germany (EXW feed corn): Mildly firm to sideways; recent uptrend suggests limited downside near current EUR 0.26–0.27/kg zone barring a sharp global futures correction.
• France (FOB corn, Paris): Sideways within a narrow EUR 0.24–0.26/kg band as the market balances global weather risk with approaching Northern Hemisphere harvest prospects.
• Ukraine (CPT/FOB corn, Odesa): Slightly firmer bias from current EUR 0.18–0.19/kg levels if Black Sea logistics tighten or if El Niño‑related news supports global grain markets, but still expected to trade at a discount to EU origins.