Corn prices fell, despite lower forecasts for world production and stocks and a higher consumption estimate in the USDA report

In October's supply and demand balance sheet, USDA experts again lowered their 2024/25 FY 2024/25 global corn production and inventory forecasts and raised their estimate of consumption, which will significantly exceed production.

December corn futures on the Chicago Mercantile Exchange fell 0.7% to $163.7/t (+2.8% from the September report) on the report, as traders reacted to a cut in the import forecast for China, ignoring a slight adjustment to production estimates for the US and South America.

Maize export forecasts for Argentina in FY 2023/24 were immediately reduced by 3 million tons, and for Brazil by 2 million tons, which increased global stocks at the beginning of FY 2024/25 by 3 million tons and improved the balance of the new season.

Analysts had expected lower estimates of corn yield and production for the US, but USDA experts increased the yield forecast from 183.6 to 183.8 bushels/acre (11.53 t/ha) and production - by 0.42 to 386.15 million tons ( 389.7 million tons last year).

Compared to the September estimates, the new corn balance for the 2024/25 FY has undergone the following changes:

• The estimate of initial reserves was increased by 3.02 to 312.65 mln t (304.09 mln t in FY 2023/24) after adjusting the balance for FY 2023/24.
• The global production forecast was reduced by 1.38 to 1217.19 million tons (1225.92 million tons in 2023/24 MR and 1160 million tons in 2022/23 MR), in particular for Ukraine – by 1 to 26.2 (32.5 ) million tons (with the forecast of the Ministry of Agriculture at 25.8 million tons), Egypt - by 0.6 to 7 (7.2) million tons, the Russian Federation - by 0.5 to 13 (16.6) million tons, while for In the USA, the estimate was increased by 0.5 to 386.2 (389.7) million tons.
• The global consumption forecast was increased by 3.47 to 1223.32 (1217.35) million tons, which will exceed world production by 6.13 million tons, primarily due to increased consumption of feed and biodiesel in Argentina and Brazil.
• The estimate of world exports was reduced by 0.87 to 190.5 (195.77) million tons, in particular for Ukraine – by 1 to 23 (29.6) million tons and for the Russian Federation – by 0.5 to 3.3 (6, 2) million tons, while for the USA the forecast was increased by 0.6 to 59.1 (58.23) million tons.
• The estimate of world imports was reduced by 1.56 to 183.84 (192.81) million tons, in particular for China – by 2 to 19 (23.5) million tons, while for Egypt the forecast was increased by 0.4 to 8.2 (8) million tons
• The forecast of global ending stocks was reduced by 1.83 to 306.52 (312.65) million tons, although analysts estimated them at 306.8 million tons. The stock estimate for China was reduced by 2 to 209.34 (211.36) million tons and the USA by 1.5 to 50.8 (44.7) million tons, but increased for Argentina by 1 to 2.79 (4.09) million tons and Mexico by 0.8 to 3.43 (3.96) million tons

A decrease in the forecast of corn exports from the Black Sea region will keep prices for Ukrainian corn at a high level, especially against the background of increased demand from Egypt and Turkey, although a reduction in imports by China and an increase in supplies from the United States will limit further price growth.