USDA improves corn balance by 2021/22 MP, but worsened for 2022/23 season

On May 12, USDA experts updated the balance of supply and demand of corn for 2021/22 MY, which sharply increased the estimate of production and final stocks, while in the balance for 2022/23 MY forecasts of production, consumption, exports and final stocks significantly decreased. This will increase the pressure on the prices of the old harvest, but will support the prices of the new harvest, which are likely to rise to the current level.

It is expected that in 2022/23 MY world corn production will increase by 16.22 million tons, despite lowering the production forecast for the United States and, especially, Ukraine, where only 19.5 million tons of grain will be harvested compared to 42 million tons in 2021 / 22 MR.

In the Chinese report CASDE, the forecast of corn imports for 2022/23 MY was reduced by 10% to 18 million tons due to high prices.

The May balance for 2021/22 MY has undergone the following changes compared to the April report:

• The estimate of initial reserves was increased by 1 million tons to 293.17 million tons (306.37 million tons in 2020/21 MY).
• Production forecast increased by 5.17 million tons to 1215.62 million tons (1129 million tons in 2020/21 MY), although despite the dry weather estimates for Brazil and Argentina remained at 116 and 53 million tons (87 and 51.5 million t in 2020/21 MR, respectively).
• Estimates of world consumption increased by 2.25 million tons to 1,194.4 million tons (1,143.29 million tons in 2020/21 MY).
• The forecast of world exports increased by 0.79 million tons to 197.79 million tons (182.97 million tons in 2020/21 MY), although for Ukraine, the United States, Argentina and Brazil estimates remained unchanged.
• The estimate of final stocks increased by 3.93 million tons to 309.39 million tons (293.17 million tons in 2020/21 MY), while analysts expected them to decrease to 303.8 million tons.

The balance for 2022/23 MR has also changed:

• The forecast of world production was reduced to 1.18 billion tons (1.215 billion tons in 2021/22 MY and 1.129 billion tons in 2020/21 MY). In particular, in comparison with 2021/22 MY, the production estimate for Ukraine was reduced from 42.1 to 19.5 million tons, the United States - from 383.9 to 367.3 million tons, the EU - from 70.5 to 68.25 million tons , India - from 32 to 31.5 million tons, Turkey - from 6.5 to 6 million tons, China - from 272.55 to 271 million tons, while increased the estimate for Brazil from 116 to 126 million tons, Argentina - from 53 up to 55 million tons, Russia - from 15.2 to 15.5 million tons, Serbia - from 6 to 7.2 million tons, South Africa - from 16.3 to 17.3 million tons.
• The forecast of world exports in comparison with 2021/22 MY was reduced from 197.8 to 182.7 million tons, in particular for Ukraine - from 23 to 9 million tons, the United States - from 63.5 to 60.96 million tons, Russia - from 4 , 5 to 4.3 million tons, India - from 3.3 to 2.4 million tons, the EU - from 5.2 to 4.7 million tons, Canada - from 1.8 to 1.6 million tons, while increased the estimate for Brazil from 44.5 to 47 million tons, Argentina - from 39 to 41 million tons and Paraguay - from 1.7 to 2.1 million tons.
• The estimate of world imports was reduced from 181 to 176.84 million tons, in particular for China - by 5 million tons from 23 to 18 million tons, which will be 11.5 million tons lower than in 2020/21 MY.
• It is expected that corn stocks in 2022/23 MY will decrease compared to 2021/22 MY from 309.39 to 305.13 million tons, in particular in China - from 210.2 to 204.2 million tons, the EU - from 8.7 up to 8.6 million tons, the United States - from 36.57 to 34.5 million tons, while they will grow in Brazil from 4.65 to 7.95 million tons, Ukraine - from 6.77 to 8.07 million tons.

July futures in Chicago responded to the bearish report for the old harvest by falling 1.3% to $ 307.6 / t, although they rose 3.2% in the month.

December corn futures rose 2.4% to $ 296.44 / ton, up from the previous month.