Corn prices fell amid a sharp increase in forecasts for global production and stocks

An uptick in global corn production and inventory forecasts in a new USDA report added pressure on quotes. For the USA, Ukraine and the Russian Federation, production estimates have been increased due to good yields, while for Mexico the forecast has been lowered, although the harvest will exceed last year by 5.4% or 63.7 million tons.

Compared to the October estimates, the corn balance for the 2023/24 MY underwent the following changes:

• The estimate of initial reserves was increased by 1.09 to 299.23 million tons (310.34 million tons in MY 2022/23) as a result of data adjustments for MY 2022/23.
• The global production forecast was increased by 6.32 to 1,220.79 million tons (1,157 million tons in MY 2022/23, 1,217 million tons in MY 2021/22 and 1,129 million tons in MY 2020/21), in particular for the USA by 4.32 up to 386.97 (348.4) million tons, Ukraine – by 1.5 to 29.5 (27) million tons and the Russian Federation – by 1.4 to 16 (15.8) million tons, which compensates for the decrease in the harvest in Mexico, Egypt and Indonesia.
• The global consumption estimate was increased by 4.83 to 1205.3 (1168.2 1202.9 and 1143.29) thanks to increased biofuel production in the US and Canada.
• The global export forecast was increased by 3.32 to 199.62 (180.94) million tons, in particular for the USA – by 1.27 to 52.7 (42.2) million tons, Ukraine – by 0.5 to 20 (27 ) million tons, the Russian Federation – by 1.1 to 5.3 (5.9) million tons.
• The global import forecast was increased by 2.95 to 189.87 (172.21 and 184.59) million tons, in particular for Mexico by 0.8 million tons, Egypt – by 1 million tons, Canada – by 1 million tons, the EU – by 0.5 million tons.
• The estimate of global ending stocks was raised by 2.59 to 314.99 (299.22, 306.9 and 293.29) million tonnes, although analysts estimate them at 312.05 million tonnes. This will keep corn prices at their lowest levels until end of season The stocks will grow the most in the USA, Ukraine, Paraguay and China, and will decrease in Iran.

According to the report, December corn futures in Chicago fell 1.7% to $184.2/t (-6% compared to the date of the previous report), and November futures in Paris fell 0.8% to €206.75/t or $220.7/t (+3.5%).

Estimates were left unchanged for Brazil and Argentina, although analysts are downgrading Brazil’s crop forecast amid heat during first-crop planting and delays in soybean planting, which could reduce second-crop corn acreage and overall production.