USDA raised its forecast for global corn consumption in 2024/25 MY to a record level, which supported quotes

In the April supply and demand report, USDA experts again raised the forecast for global corn consumption to a new record high and lowered the estimate of global ending stocks in the 2024/25 MY, which supported quotes, even despite increasing (adjusting) the estimate of beginning stocks and production again.

The increase in the consumption forecast led to a decrease in the estimate of ending stocks and a drop in the value of corn futures in Chicago.

USDA experts sharply raised forecasts for corn exports from the US (against active supplies in the first half of the season) and imports to the EU and Mexico, not taking into account that “Trump’s tariff wars” could significantly reduce supplies of American corn. The unpredictable tariff policy of the new US administration is stopping purchases of all American products by other countries.

According to the report, May corn futures on the CBOT exchange in Chicago rose by 1.9% to $190.15/t (+2.7% compared to the data after the March report), and December corn futures rose by 0.8% to $178.8/t and remain under pressure from increased harvest forecasts in the US in the new season and the escalation of trade relations with China, as well as a possible drop in exports to China in the new season.

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

• The estimate of initial reserves was increased by 0.38 million tons to 314.33 million tons (304.83 million tons in 2023/24 MY).
• The forecast for world production was increased by 0.93 million tons to 1,215.10 million tons (1,230 million tons in 2023/24 MY and 1,160 million tons in 2022/23 MY), in particular for the EU - by 1.3 million tons to 59.3 (61.95) million tons. The forecasts for Argentina and Brazil remained unchanged, although analysts expected a decrease in the estimate for Argentina.
• The forecast for global consumption has been increased by 2.59 million tons to a record 1,241.78 million tons (1,219.09 million tons in 2023/24 MY), in particular for the EU - by 1.7 million tons to 77.4 (78.1) million tons and for Mexico - by 0.4 million tons.
• The estimate of world exports was increased by 2.32 million tons to 188.68 million tons (193.25 million tons in 2023/24 MY), in particular for the USA - by 2.47 million tons to 64.77 (58.23) million tons. The forecasts for Brazil, Argentina and Ukraine have not changed.
• The estimate of world imports has been increased by 1.79 million tons to 182.09 million tons (197.13 million tons in 2023/24 MY, in particular for the EU - by 0.5 million tons to 20 (19.83) million tons and Mexico - by 0.5 million tons to 25 (24.76) million tons, as well as for Turkey and Peru.
• The forecast for world ending stocks was reduced by 1.29 million tons to 287.65 million tons (314.33 million tons in 2023/24 MY), in particular for the USA - by 1.9 to 37.22 (44.79) million tons, while analysts estimated world stocks at 288.2 million tons and US stocks at 38.4 million tons.

The sharp drop in oil prices and forecasts of a slowdown in the US and Chinese economies due to tariff wars are reducing consumption and demand for corn from the ethanol industry.

Additionally, U.S. corn exports fell to 785.6 thousand tons in the week ended April 3, the lowest level in 13 weeks. They are likely to continue to decline, even with the 90-day delay in tariffs.

Weather in South America is helping the crop, and local agencies have raised their pessimistic crop estimates to USDA levels. CONAB raised its forecast for Brazil’s corn crop by 1.98 million tonnes to 124.75 million tonnes, largely due to a larger second crop, while the Rosario Grains Exchange raised its estimate for Argentina’s corn crop by 4 million tonnes to 48.5 million tonnes.