Despite the USDA's inventory estimate being lowered, corn prices in Chicago fell

In its March corn supply and demand report, the USDA sharply lowered its estimate of global beginning stocks in the 2024/25 marketing year, which, combined with an increase in consumption forecasts, led to a decrease in the estimate of ending stocks, even despite the expected increase in production. But corn futures in Chicago fell under pressure from a significant reduction in global export and import forecasts.

Compared to February estimates, the world corn balance for the 2024/25 MY has undergone the following changes:

• The estimate of opening stocks has been reduced by 1.86 million tonnes to 313.95 million tonnes (304.83 million tonnes in 2023/24 MY) due to a decrease in stocks for Argentina and Brazil in 2023/24 MY by 0.5 and 1.4 million tonnes, respectively.
• The global production forecast is raised by 1.7 million tonnes to 1,214.17 million tonnes (1,230 million tonnes in 2023/24 MY and 1,160 million tonnes in 2022/23 MY). Increased production in Ukraine and the Russian Federation offsets declines in South Africa and Mexico. The forecasts for Argentina and Brazil remain unchanged as recent rains have improved crop conditions.
• The forecast for global consumption has been increased by 1.23 million tons to a record 1,239.19 million tons (1,219.09 million tons in 2023/24 MY), primarily for Brazil, Ukraine, and the Russian Federation.
• The estimate of world exports has been reduced by 2.87 million tons to 186.36 million tons (193.25 million tons in 2023/24 MY), in particular for Brazil - by 2 million tons to 44 million tons, and South Africa - by 0.9 million tons to 1.7 million tons due to a significant reduction in demand from China.
• The estimate of global imports has been reduced by 0.86 million tons to 180.3 million tons (197.13 million tons in 2023/24 MY, in particular for China - by 2 million tons to 8 million tons (23.5 million tons in 2023/24 MY), which is partially offset by increased supplies to Turkey, Vietnam, Colombia and Egypt.
• The forecast for world ending stocks has been reduced by 1.37 million tonnes to 288.94 million tonnes (313.95 million tonnes in 2023/24 MY), in particular for China – by 2 million tonnes to 201.18 million tonnes (211.29 million tonnes) and Argentina, which is partially offset by the growth in stocks in India and the Russian Federation. At the same time, analysts estimated stocks at 289.9 million tonnes.

For the US, corn supply and consumption forecasts for 2024/25 MY remained unchanged, although the market expected a decrease in the estimate of ending stocks. Therefore, despite the bullish report, corn quotes decreased.

March corn futures on the CBOT exchange in Chicago fell by 0.5% to $179.7/t (-6% compared to the data after the February report), and May corn futures fell to $185.1/t.

China's nearly three-fold reduction in imports compared to the previous season is weighing on prices, especially against the backdrop of falling oil prices and forecasts of a slowdown in the US economy due to tariff wars with China and Mexico, the main buyers of American corn. Prices in the physical market are falling due to favorable planting weather in South America.