USDA raises forecasts for global corn production and stocks again

In the November supply and demand report (WASDE), the US Department of Agriculture (USDA) again, as in the October report, increased forecasts for world production, as well as initial and final corn stocks in 2021/22 MG – this will continue to increase pressure on World corn prices, and markets will now be strongly dependent on demand from China.

December corn futures on the Chicago Stock Exchange rose slightly yesterday by 1 1.28/ton to.218.4/ton, but the downward trend in quotations that has been observed for a week is likely to continue this week after the bearish forecast is released.

The forecast of initial reserves for my 2021/22 was increased by 1.88 million tons to 291.87 million tons due to an increase in the estimate of World corn production in the balance sheet for my 2020/21 by 3.52 million tons to 1119.02 million tons, and consumption estimates by 2.02 million tons to 1133.63 million tons.

The forecast for global corn production in my 2021/22 was sharply increased by 6.4 million tons to 1,204.62 million tons (1,119. 02 million tons in my 2020/21), in particular for the US by 1.1 million tons to 382.59 million tons (358.4 million tons in my 2020/21 and 385.2 million tons in the July report), for the EU – by 1.55 million tons to 67.85 million tons (64.4 million tons), Argentina – by 1.5 million tons to 54.5 million tons (50.5 million tons).

The forecast for the harvest in Ukraine was left at 38 million tons, although some local analysts increased their forecasts to 38.7-39 million tons.

The forecast for global corn consumption was also sharply raised by 5.61 million tons to 1,192.07 million tons, which is 58.5 million tons higher than in 2020/21 MG, primarily due to an increase in corn consumption for ethanol due to rising gasoline prices.

The forecast for world exports was raised by 1.56 million tons to 203.47 million tons, in particular for Argentina – by 1 million tons to 39 million tons (38.5 million tons in 2020/21 MG), the EU by 0.3 million tons to 4.4 million tons.

The forecast for corn imports was increased for Iran and Thailand, but lowered for Nigeria and Turkey, which generally left forecasts at the level of the October report.

As a result of the increase in supply, the forecast of World Final corn stocks at the end of 2021/22 MG was increased by 2.68 million tons to 304.42 million tons, which will exceed the average forecast of analysts – 300.8 million tons, and already by 12.6 million tons higher than in 2020/21 mg.

It is worth noting that in the world balance sheet for 2020/21 mg, the forecast for corn exports from Brazil was lowered by 2.5 million tons to 17.5 million tons, but raised for Argentina, as well as the forecast for corn imports to China by 1.51 million tons to 29.51 million tons (7.58 million tons in 2019/20 mg).

At the same time, the forecast of corn imports to China in 2021/22 MG remained at 26 million tons, although the “official” Chinese authorities left their import forecast at 20 million tons with a production forecast of 270.96 million tons against the USDA forecast of 273 million tons.

Therefore, the market will again expect an increase in corn buying activity from China, and in the event of a decrease in import volumes, corn prices will be under strong pressure.

Grain Trade

Tags: EU, USA, Argentina, Iran, China, corn, Turkey, Brazil