USDA experts again unexpectedly lowered the forecast for US corn production, which supported the quotations

In the November WASDE report, USDA experts unexpectedly for analysts again significantly lowered the forecast for US corn production, which surprised the market. Recall that in the September report they lowered the forecast for the US corn harvest by 5.42 million tons, but in the October report they increased it by 5.95 million tons, but in November they lowered it again by 3.57 million tons, which exceeded analysts' expectations and led to a slight increase in quotes in Chicago.

Yesterday, December corn futures in Chicago rose 2.2% to $176.8/t (-6.8% compared to the level after the October report), and March corn futures in Paris rose 2.1% to €255/t or $286/t (-7.2%).

USDA experts lowered their estimates for corn yield in the US from 181.2 bushels/acre to 179.6 bushels/acre, although analysts expected a decrease to 180.3 bushels/acre (Stone X optimistically estimated it at 183.1 bushels/acre), but left the forecast for the area to be harvested at 88.5 million acres, so the forecast for corn production in the US was reduced by 3.57 million tons to 403.7 (430.9) million tons.

The world corn balance for the 2026/27 MY compared to October estimates has undergone the following changes:

• The estimate of initial reserves was increased by 1.15 million tons to 308.31 million tons (295.69 million tons in 2025/26 MY).
• The forecast for world corn production has been reduced by 2.2 million tons to 1.2916 (1.3347) billion tons, in particular for the USA - by 3.57 to 403.7 (430.9) million tons, South Africa - by 1.5 to 15 (18.4) million tons, the EU - by 0.5 to 47.5 (56.8) million tons, while estimates for Argentina have been increased by 2 million tons to 57 (64) million tons and Brazil - by 2 to 141 (144.5) million tons.
• The estimate of world consumption has been reduced by 2.55 million tons to 1.3179 (1.3221) billion tons, in particular for China - by 2 million tons to 322 (320) million tons, the EU - by 1.5 to 69.5 (76) million tons, Mexico - by 0.7 to 51.7 (51) million tons and the USA - by 0.6 to 329.7 (330.78) million tons, which will be offset by an increase in consumption in Brazil by 2 million tons to 104 (103.5) million tons.
• The forecast for world corn imports has been reduced by 1.95 million tons to 201.43 million tons (199.6 million tons), in particular for the EU by 1 million tons to 22.5 (20) million tons, and for Mexico - by 0.5 to 26.7 (26.16) million tons.
• The forecast for world corn exports has been reduced by 1.34 million tons to 209.38 (215.36) million tons, in particular for Ukraine - by 2 to 20 (22.2) million tons and for the USA - by 0.63 to 83.19 (87.11) million tons, which is offset by an increase in exports from Argentina by 2 million tons to 40 (45) million tons.
• The estimate of world ending corn stocks has been increased by 1.5 million tons to 281.94 million tons (308.3 in 2025/26 MY and 296.7 million tons in 2024/25 MY), in particular for Ukraine - by 2 million tons to 7.53 (2.9) million tons, China - by 1.8 million tons to 166.95 (176.97) million tons and Brazil - by 0.5 million tons, while for the USA the estimate has been reduced by 2.3 to 44.67 (53.2) million tons, as well as for South Africa and Mexico.

Favorable weather for corn and soybean planting in South America is improving crop forecasts, helping to increase supplies of old crops from Argentina and Brazil and offsetting a decrease in supply from Ukraine. If the weather is conducive to crop formation in the southern hemisphere, Ukraine will find it difficult to sell its significant stocks in the second half of the season.