USDA experts lowered forecasts for world corn production and stocks

In a March report, USDA experts lowered corn production forecasts for Ukraine, Mexico and South Africa and raised those for Argentina, adding pressure to quotations. The weather in Brazil favors the planting and development of second-crop corn crops, so the forecast has been left unchanged for now.

According to the report, March corn futures on the Chicago exchange rose by 0.4% to $173.1/t (+1.5% compared to the data after the February report), and on the Paris exchange - by 0 .7% to €174.5/t or $190.9/t (+1%).

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

• The estimate of initial reserves was increased by 1.37 million tons to 301.62 million tons (310.52 million tons in FY 2022/23) due to an increase in production in FY 2022/23 by 1.6 million tons.
• The global production forecast was reduced by 2.33 to 1,230.24 million tons (1,157.53 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 1.3 to 15.5 million tons, Ukraine – by 1 to 29.5 million tons, Mexico – by 1 to 24 million tons, Venezuela – by 0.95 million tons, the Russian Federation – by 0.4 to 16.6 million tons, while the estimate for Argentina was increased by 1 to 56 million tons. Unexpectedly for the market, the forecast for Brazil was left at the level of 124 million tons, although analysts expected it to decrease to 121.95 million tons.
• The estimate of world consumption was increased by 1.48 to 1212.24 million tons (1166.56 million tons in 2022/23 MR, 1202.9 million tons in 2021/22 MR and 1143.29 million tons in 2020/21 MR), in particular for Brazil – by 1 million tons, while it was reduced for the EU by 1 million tons and South Africa by 0.7 million tons.
• The global export forecast was increased by 1.45 to 202.27 (180.19) million tons, in particular for Ukraine – by 1.5 to 24.5 (27.12) million tons, Argentina – by 1 to 42 (25) million t, while it decreased for South Africa – by 0.5 to 2.9 million tons and India – to 1.8 million tons.
• The global import forecast was reduced by 0.34 to 189.48 (172.21 and 184.59) million tons, in particular for the EU – by 1 to 22 (23.15) million tons, Saudi Arabia – to 4.6 million tons, Israel - up to 1.6 million tons, South Korea - up to 11.6 million tons, while it was increased for Mexico by 1 to 20.6 million tons, Venezuela - up to 1 million tons, Indonesia - up to 1.2 million tons. For For China, the estimate was left at the level of 23 million tons.
• The estimate of world ending reserves was reduced by 2.43 to 319.63 (301.62, 306.9 and 293.29) million tons, while analysts estimated them at 320.39 million tons. For Ukraine, the estimate was reduced by 2.5 to 2.82 million tons, which will correspond to last year's level, and for Brazil it was increased by 0.2 to 6.17 million tons.

Ukrainian corn remains the cheapest on the world market, so its exports will continue to grow, despite forecasts of a reduced harvest. If the weather in South America is conducive to the development of second crop crops and harvesting, then prices will remain under pressure from a significant volume of supply.