USDA Experts Did Not Reduce Corn Production Forecasts in Brazil and Argentina, Surprising Traders

2024-06-13 10:07:49
Machine translation
USDA Experts Did Not Reduce Corn Production Forecasts in Brazil and Argentina, Surprising Traders

Traders were primarily focused on the global corn balance data for the 2023/24 MY, where significant reductions in the corn crop forecast for Brazil and Argentina were expected. Such changes would also affect the balance for the new season. However, USDA experts remain optimistic about the harvest in South America.

 

In the global corn balance for the 2023/24 MY, the USDA did not change the global corn production forecast, keeping it at 1228.1 million tons. The forecasts for Brazil remained at 122 million tons, and for Argentina at 51 million tons, while average market expectations were lower at 121 million tons and 50.9 million tons, respectively.

 

Additionally, in this season's balance, corn export estimates were increased by 1.73 million tons to 199.11 million tons, and the consumption forecast was increased by 1.03 million tons to 1216.95 million tons, which will increase the initial stocks for the new season by 0.69 million tons to 312.39 million tons compared to 300.94 million tons in the previous season.

 

Compared to the May balance, the new balance for corn in the 2024/25 MY did not undergo significant changes:


- The initial stock estimate was reduced by 0.69 million tons to 312.39 million tons (300.94 million tons in the 2023/24 MY).


- The global production forecast was raised by 0.61 million tons to 1220.54 million tons (1228.1 million tons in the 2023/24 MY), including an increase for Ukraine by 0.7 million tons to 27.7 million tons (31 million tons in the 2023/24 MY), which offsets the reduction in Russia by 0.6 million tons to 15.4 million tons (16.6 million tons).


- The global consumption estimate was raised by 1.41 million tons to 1222.16 million tons (1216.65 million tons in the 2023/24 MY), considering increased consumption in Ukraine (+0.2 million tons), the EU (+0.1 million tons), and Southeast Asia (+0.15 million tons).


- The global export forecast was raised by 0.65 million tons to 191.75 million tons (199.11 million tons in the 2023/24 MY), including an increase for Ukraine by 0.5 million tons to 24.5 million tons (26 million tons), but reduced for Russia by 0.2 million tons to 5 million tons (6 million tons). Export forecasts for the USA, Brazil, and Argentina remained unchanged.


- The global import forecast was raised by 1.79 million tons to 186.16 million tons (186.58 million tons).


- The ending stocks estimate was reduced by 1.5 million tons to 310.77 million tons (312.39 million tons in the 2023/24 MY).

 

Following the report's release, July corn futures on the Chicago exchange rose by 1% to $178.8/t (-3.4% compared to post-report data in May), and December futures rose by 0.8% to $184.5/t (-5%). However, overall bearish corn balances for the 2023/24 and 2024/25 MY will exert pressure on prices, especially amid improving weather conditions in the USA.

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