USDA lowered the corn export forecast for Brazil, but raised it for Ukraine

In a February report, USDA experts lowered forecasts for global corn production and stocks in FY2023/24, especially for the Brazilian crop, but quotes were largely unresponsive, as improved conditions for planting second-crop corn in Brazil could lead to revised estimates.

According to the report, March corn futures on the Chicago exchange fell by 0.2% to $170.6/t (-3.2% compared to the data after the December report), and on the Paris exchange by 1 .3% to €176.25/t or $190.3/t (-8.4%).

Compared to the January estimates, the new corn balance for the 2023/24 FY has undergone the following changes:

• The estimate of initial reserves was reduced by 0.31 to 300.25 mln t (310.52 mln t in FY 2022/23) as a result of balance adjustments for FY 2022/23.
• The global production forecast was reduced by 3.16 to 1,232.57 million tons (1,155.94 million tons in 2022/23 FY, 1,217 million tons in 2021/22 FY and 1,129 million tons in 2020/21 FY), in particular for Brazil - on 3 to 124 (137) million tonnes, although traders had expected a 2.2 million t cut in Brazil's crop forecast, and local agency Conab lowered its estimate by 3.9 to 113.7 million tonnes.
• The forecast of world consumption was reduced by 0.31 to 1210.76 (1166.19; 1202.9 and 1143.29) million tons.
• The estimate of world exports was reduced by 0.07 to 200.82 (180.99) million tons, in particular for Brazil – by 2 to 52 (57) million tons, while it was increased for Ukraine by 2 to 23 (27.12) million tons An increase in corn supplies to Pakistan and a decrease to India and Serbia are also expected.
• The estimate of world imports was reduced by 0.94 to 189.82 (172.21 and 184.59) million tons, in particular for the EU - by 0.5 to 23 (23.15) million tons.
• The forecast of world final stocks was reduced by 3.16 to 322.06 (300.25; 306.9 and 293.29) million tons (although analysts estimated them at 324.5 million tons), in particular for Ukraine, Brazil, India, the EU , Mexico and Paraguay.

For the USA and China, the corn balances were left almost unchanged.

Ukrainian corn remains the cheapest on the world market, so a reduction in exports from Brazil will support demand for corn prices in Ukraine. At the same time, the reduction of prices in the EU will not allow to increase supplies from Ukraine to the traditional markets of Europe.