USDA experts again raised forecasts for global corn production, consumption and stocks in FY 2023/24

Quotations reacted to another increase by USDA experts in the estimates of world production, consumption and reserves of corn in the 2023/24 MR by falling by 3.8%. Improving weather in the US Midwest is also adding to price pressure.

On the Chicago Mercantile Exchange, December corn futures fell 3.8% yesterday to the lowest level since October 2021 at $190.45/t, losing 13.7% for the month.

On the Paris exchange, November corn futures fell just 0.4% to €223/t or $255/t yesterday (-3.3% for the month), supported by a further cut in the EU production forecast.

In the balance sheet for FY 2022/23 , as a result of a slight increase in the global production forecast, the estimate of ending stocks was reduced by 1.26 to 296.3 million tons. For Brazil, the harvest forecast was increased by 1 million tons to 133 million tons, which compensates for the decrease in the estimate for Argentina by 1 million tons to 34 million tons. The export forecast for Brazil was increased by 1 to 56 million tons, for Argentina it was reduced by 1 to 22 million tons. For Ukraine, the export forecast was increased by 1 to 28 million tons, which corresponds to the estimates of local agencies, and for the USA it was reduced by 1.91 to 41.91 million tons due to increased competition with Brazil.

Traders' attention was focused on the balance sheet for the US for 2023/24 MR , as after the increase in sown area, everyone expected to see a decrease in the production forecast to 386.95 million tons due to the drought-induced decrease in yield to 11.08 t/ha. However, in comparison with June estimates, USDA experts reduced the yield forecast from 11.38 t/ha to only 11.13 t/ha, therefore the production forecast was increased from 387.75 to 389.15 million tons (348.7 million tons in 2022/ 23 MR).

In comparison with the June report, the new corn balance for 2023/24 MR has undergone the following changes:

• The global production forecast was increased by 1.7 million tons to a record 1,224.47 million tons (1,150.68 million tons in 2022/23 FY, 1,217 million tons in 2021/22 FY and 1,129 million tons in 2020/21 FY), in particular for USA – by 1.4 to 389.15 (348.7) million tons, Ukraine – by 0.25 to 25 (27) million tons, and Canada – by 0.7 to 15 (14.54) million tons, while for the EU, the estimate was reduced by 0.9 to 63.4 (52.97) million tons.
• The estimate of world consumption was increased by 0.3 million t to a record 1206.65 million t (1164.26 million t in 202/23 MR, 1202.9 million t in 2021/22 MR and 1143.29 million t in 2020/21 MR ) against the backdrop of increased imports caused by a drop in prices.
• The global export forecast was increased by 0.5 million tons to 198.26 million tons (176.57 million tons in 2022/23 MR and 204.7 million tons in 2021/22 MR), in particular for Ukraine - by 0.5 to 19 .5 (28) million tons.
• The forecast of world imports has been increased by 1.4 to 188.4 (175.03 and 184.59) million tons, in particular for the EU - by 1.5 to 24 (24.5) million tons against the background of reduced production and increased supplies from Ukraine .
• The estimate of world ending reserves was increased by 0.14 to 314.12 million tons (296.3 million tons in 2022/23 FY, 306.9 million tons in 2021/22 FY and 293.29 million tons in 2020/21 FY), which almost corresponds to the analysts' forecast of 314.33 million tons.