Corn prices fell, despite lower forecasts for global production and stocks, as well as higher consumption estimates in the USDA report

In the October balance of supply and demand, the USDA experts again lowered the forecasts of global corn production and stocks in MY 2024/25, and increased the estimate of consumption, which will significantly exceed the production.

According to the report, the December corn futures on the Chicago Board of Trade fell by 0.7% to 163.7 $/t (+2.8% compared to the data after the release of the September report), as traders reacted to the reduction of import forecast for China, ignoring the slight adjustment of production estimates for the United States and South America.

The forecast of corn exports for Argentina in 2023/24 MY was reduced by 3 mln tonnes, and for Brazil – by 2 mln tonnes, which will increase the world stocks in early MY 2024/25 by 3 mln tonnes and improve the balance of the new season.

Analysts had expected lower estimates of corn yields and production for the United States, but USDA experts raised the yield forecast from 183.6 to 183.8 bushels/acre (11.53 t/ha), and production – by 0.42 to 386.15 million tons (389.7 million tons last year).

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

• Estimate of beginning stocks increased by 3.02 to 312.65 mln tonnes (304.09 mln tonnes in MY 2023/24) after adjusting the balance for MY 2023/24.
• The forecast for world production has been reduced by 1.38 to 1217.19 million tons (1225.92 million tons in 2023/24 MY and 1160 million tons in MY 2022/23), in particular for Ukraine – by 1 to 26.2 (32, 5) million tons (with the forecast of the Ministry of Agrarian Policy at 25.8 million tons), Egypt – by 0.6 to 7 (7.2) million tons, Russia – by 0.5 to 13 (16.6) million tons, while for the United States the estimate was increased by 0.5 to 386.2 (389.7) million tons.
• The forecast of world consumption was increased by 3.47 to 1223.32 (1217.35) million tons, which is 6.13 million tons higher than the volume of world production, primarily due to increased consumption for feed and biodiesel in Argentina and Brazil.
• The estimate of world exports was lowered by 0.87 to 190.5 (195.77) million tons, in particular for Ukraine – by 1 to 23 (29.6) million tons and for Russia – by 0.5 to 3.3 (6.2) million tons, while for the United States the forecast was increased by 0.6 to 59.1 (58.23) million tons.
• The estimate of world imports was lowered by 1.56 to 183.84 (192.81) million tons, in particular for China – by 2 to 19 (23.5) million tons, while for Egypt the forecast was raised by 0.4 to 8.2 (8) million tons.
• The forecast of world ending stocks was lowered by 1.83 to 306.52 (312.65) million tons, although analysts estimated them at 306.8 million tons. The stocks estimate was lowered for China by 2 to 209.34 (211.36) million tons and the United States by 1.5 to 50.8 (44.7) million tons, but increased for Argentina by 1 to 2.79 (4.09) million tons and Mexico by 0.8 to 3.43 (3.96) million tons.

The lower forecast of corn exports from the Black Sea region will keep prices for Ukrainian corn high, especially amid increased demand from Egypt and Turkey, although the reduction in imports by China and increased supplies from the United States will limit further price increases.

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Tags: corn, prices