Unexpectedly bearish USDA report lowered the price of corn

New USDA report once again surprised market participants, because in addition to changing the areas of trade, decrease in the forecast of consumption, and ending stocks of corn in the world, in balance was not changed assessment of the corn crop in South America.

Traders had expected in the February report forecast global corn ending stocks will be reduced by 4.5 million tonnes to 279 million tonnes, but experts USDA, on the contrary, increased by 2.7 million tonnes to the 286, 5 million tonnes (you 303.4 million in 2019/20 MG) due to a sharp growth in China 4.5 million tonnes to 196,18 million tonnes (200,5 million tonnes in 2019/20 MG). At the same time for the U.S., the forecast of ending stocks of corn decreased by 1.27 million tonnes to 38.15 million tonnes (48,76 million tonnes in 2019/20 MG) due to its active export to China.

Assessment of global corn production has slightly increased due to the increase in crop forecast for South Africa to 0.5 million tonnes, while for Argentina and Brazil, the crop forecasts were left unchanged amid improving weather conditions.

Due to an increase in imports and consumption of coarse grains with China forecast of the global corn imports increased by almost 3 million tons, exports to 2 million tons For China's forecast of import of corn in 2020/21 MG increased by 6.5 million tons to 24 million tonnes, compared to 7.6 million tonnes in 2019/20 MG, which will be partially offset by a decline in imports of maize in the EU to 27 million tonnes, in the UK and 2.5 million tonnes to 15.5 million tonnes, in South Korea, by 0.5 million tons to 11.5 million tons in Japan by 0.4 million tons to 15.6 million tonnes, India – by 0.2 million tons to 0.1 million tons, Saudi Arabia and Turkey – 0.2 million tonnes to 2.5 million tonnes.

the Forecast of world corn exports increased by 2.07 million tonnes due to an increase in U.S. exports to 1.27 million tonnes to 66,04 million tonnes (45.17 million tonnes in 2019/20 MG) and South Africa by 0.2 million tonnes to 3 million tonnes.

Estimation of the global consumption of corn in 2020/21 MG was decreased by 2.54 million tonnes to 1150,52 million tons compared to 1133,06 million tonnes in 2019/20 MG, in particular for the EU of 2.5 million tons, South Korea – 0.4 mln t in Japan at 0.4 million tonnes, while China, it increased by 2 million tons Consumption of corn will decrease due to the increased demand for cheap feed wheat, which most importers replace maize in the diets of feeds.

After the publication of the report of the March and the may corn futures fell 2.5% to 217 $/t

For Ukraine, the balance of corn has not changed, but the forecast reduction of import of corn in the EU and the purchase of U.S. corn to China, which is the second main buyer of domestic corn, will soon reduce demand and prices.