USDA experts downgraded the forecast of corn stocks in the current and next season supported the quotation

In the new balance sheet for corn for 2024/25 MY, published in the May WASDE supply and demand report, the forecasts of global production, exports and stocks were lowered, but the consumption was increased, which led to the growth of quotations.

At the same time, the pressure on prices was increased by the decrease of corn crop forecasts in 2023/24 MY for Brazil by 2 mln tonnes to 122 mln tonnes and for Argentina by 2 mln tonnes to 53 mln tonnes, while traders expected the larger adjustment.

Compared to the balance for 2023/24 MY, the new balance for corn for 2024/25 MY has undergone the following changes:

• The estimate of beginning stocks was increased to 313.08 million tons (300.9 million tons in 2023/24 MY and 313.6 million tons in 2022/23 MY).
• The forecast for global production has been lowered to 1219.93 million tons (1228.1 million tons in 2023/24 MY, 1157.74 million tons in 2022/23 MY, 1217 million tons in 2021/22 MY and 1129 million tons in 2020/21 MY), in particular for the United States – by 3% from a record 389.69 to 377, 46 mln tonnes due to the reduction of corn planting areas in favor of soybeans, for Ukraine – to 27 mln tonnes (31 mln tonnes in 2023/24 MY and 27 mln tonnes in 2022/23 MY), while UGA estimates it at 26 mln tonnes, for Argentina – from 53 to 51 mln tonnes. At the same time, the harvest estimates for Brazil were increased to 127 (122) mln tonnes, for the EU – to 64.8 (61) mln tonnes, and for China – from 288.84 (292) mln tonnes.
• The estimate of world consumption was increased to 1220.75 (1215.9; 1166.34; 1202.9 and 1143.29) million tons, in particular for China – by 6 to 313 million tons.
• The forecast for global exports was lowered to 191.1 million tons (197.38 million tons in 2023/24 MY and 180.3 million tons in 2022/23 MY), in particular for Ukraine – to 24 (26) million tons, Argentina – to 36 (38) million tons, Brazil – to 49 (50) million tons, while the estimate for the United States was increased to 55.88 (54.6) million tons, which will make it the world’s largest exporter of corn for the second consecutive season and increase its market share.
• The forecast of global imports was lowered to 184.37 (185.75, 172.21 and 184.59) million tons, in particular for the EU – to 18 (21) million tons, Canada – to 2.2 (3.2) million tons, as well as for Canada, Iraq and Venezuela, which is partially offset by increased imports to Mexico, Saudi Arabia, Vietnam, Egypt and Iran. For China, the estimate was left at the current season level of 23 million tons, while the country’s authorities estimate imports at 13 million tons.
• The estimate of ending stocks was lowered to 312.27 (313.08, 302.19, 306.9 and 293.29) million tons, although analysts estimated them at 317.84 million tons. For the US, the forecast was raised to 53.4 (51.36) million tons, and for China – to 212.84 (210.86) million tons.

According to the report, the July corn futures on the Chicago Board of Trade increased by 2.9% to 184.9 $/t (+9.5% compared to the data after the report was released in April), and December corn futures – by 2.5% to 193.7 $/t (+5.6%).

In Ukraine, corn prices are rising in line with the world, which, amid declining stocks, could lead to an increase in sowing areas.

Tags: prices, USDA Report, corn