USDA experts did not reduce the forecast for corn production in Brazil, which surprised the market

WASDE's April supply and demand report cut forecasts for global corn production, consumption, exports and stocks, but by much less than analysts expected, surprising the market and sending prices down. The crop forecast for Brazil was left unchanged, although local agencies lowered their estimates, but the USDA usually makes adjustments ahead of harvest.

Compared to the March estimates, the new corn balance for the 2023/24 FY has undergone the following changes:

• The estimate of initial reserves was increased by 0.58 to 302.19 million tons (310.52 million tons in FY 2022/23) as a result of balance adjustments for FY 2022/23.
• The global production forecast was reduced by 2.38 to 1,227.86 million tons (1,157.74 million tons in FY 2022/23, 1,217 million tons in FY 2021/22 and 1,129 million tons in FY 2020/21), in particular for South Africa - by 1.5 to 14 (17.1) million tons, Argentina – by 1 to 55 (36) million tons, and Mexico – by 0.5 to 23.3 (28.08) million tons. For Brazil, the harvest forecast was left at equal to 124 (137) million tons, while analysts estimated it at 121.75 million tons, and the Conab agency lowered the estimate from 112.75 to 110.9 (131.2) million tons.
• The estimate of world consumption was reduced by 0.47 to 1211.77 (1166.34; 1202.9 and 1143.29) million tons, in particular for Argentina - by 1 million tons, which will be partially compensated by the increase in consumption in the USA.
• The global export forecast was reduced by 1.68 to 200.59 (180.23) million tons, in particular for South Africa - by 0.9 to 2 million tons and India - by 0.8 million tons, while the estimate for the Russian Federation was increased by 0 .3 million tons. For the USA, Ukraine, Argentina and Brazil, the export forecasts were left unchanged, although the Conab agency lowered the forecast for Brazil by 1 to 31 million tons compared to last year's 54.6 million tons.
• The forecast of world imports was reduced by 2 to 187.47 (172.21 and 184.59) million tons, in particular for the EU - by 1 to 21 (23.15) million tons, the countries of Southeast Asia - by 0.4 million tons , while the estimate for Mexico was increased by 0.5 to 21.1 million tons. For China, the forecast was left at the level of 23 million tons.
• The estimate of global ending stocks was reduced by 1.35 to 318.28 (302.19; 306.9 and 293.29) million tons, although analysts estimated them at 316.72 million tons. For the United States, the estimate was reduced by 1.27 to 53 .9 (34.55) million tons.

Chicago May corn futures fell 0.5% to $168.8/t yesterday on the report (-2.5% from the March report), while December futures for the new crop, they are traded 9% more expensive - at the level of $183.5/t.

Ukrainian corn is offered at the best price on the world market - $175-180/t FOB, so the demand for it remains high, although the information about the canceled purchase of 4-5 vessels of Ukrainian corn by Chinese buyers in the last 2 weeks has already been confirmed.