USDA experts reduce the forecast for world corn production for the 9th month in a row

USDA's April corn balance was largely unchanged from last year, surprising traders and sending quotes lower. For the US, the balance sheet was also left unchanged, although analysts had expected a cut in the export forecast and an increase in the consumption estimate, as well as an adjustment in ending stocks.

Compared to the March estimates, the April corn balance for the 2022/23 MR underwent the following changes:

• The estimate of initial reserves was increased by 1.22 million tons to 306.9 million tons (292.54 million tons in FY 2021/22 and 306.37 million tons in FY 2020/21) as a result of the balance adjustment for FY 2021/22.
• The global production forecast has been lowered for the 9th month in a row, and this time by 3.02 million tons to 1,144.5 million tons (1,217 million tons in 2021/22 FY and 1,129 million tons in 2020/21 FY), primarily for Argentina due to the drought by 3 million tons to 37 (49.5) million tons, which is still higher than the average analyst estimate of 36 million tons, the Rosario Exchange (RGE) forecast of 35 million tons and the Buenos Aires Exchange (BAGE) forecast of 36 million tons t. For the EU, the production forecast has been reduced by 1.23 to 52.97 (71.37) million tons, as the decrease in harvest in Hungary, Italy and Bulgaria will only be partially offset by the increase in Germany, Poland and Serbia. For the Russian Federation, the forecast was increased by 1.83 to 15.83 (15.23) million tons, and for Brazil it was left at the level of 125 (116) million tons, although analysts estimated it at 126.08 million tons, Safras & Mercado agency - at 130.3 million tons, and StoneX - at 131.34 million tons, as the weather favored the sowing and development of the second crop.
• The estimate of global consumption was reduced by only 0.69 million tons to 1,156.06 million tons (1,202.9 million tons in 2021/22 FY and 1,143.29 million tons in 2020/21 FY).
• The global export forecast was reduced by 0.92 to 173.79 (204.7) million tons, in particular for Argentina – by 3 to 25 (34.4) million tons, while estimates for Ukraine were increased by 2 to 25.5 (26 .98) million tons and Russian Federation by 0.8 to 4.1 (4) million tons.
• The forecast of world imports was reduced by 0.51 to 173.97 (184.59) million tons, primarily for Egypt, the USA, Thailand and Venezuela, although for the EU it was increased by 1 to 24.5 (19.78) million tons.
• The estimate of global final reserves was reduced by 1.1 million tons to 295.35 million tons (306.9 million tons in 2021/22 FY and 293.29 million tons in 2020/21 FY), in particular for Ukraine - by 1 to 1, 39 million tons, as well as for the EU, Mexico and Serbia, while for the Russian Federation and Brazil, estimates have been increased.

Amid the neutral report, May corn futures in Chicago fell 0.4% to $256.3/t yesterday, adding 4.1% for the month after falling 8.5% in February.

December corn futures are trading at $220/t, which indicates traders' hopes for an increase in the harvest in the new season and a drop in prices, which is possible if the weather remains favorable in Brazil, as well as in the United States during sowing in May and June.