In MY 2023/24, global corn production will reach a record level, primarily thanks to the US

In the MY 2022/23 and MY 2023/24 corn balance sheets released in the May report, USDA experts raised production estimates and increased the MY 2023/24 ending stocks forecast to a 3-year high.

In comparison with the April estimates, the new corn balance for 2022/23 MY underwent the following changes:

• The forecast of initial reserves has been increased by 1.25 to 308.15 million tons (292.54 million tons in MY 2021/22 and 306.37 million tons in MY 2020/21) as a result of balance adjustments for MY 2021/22.
• The estimate of world production was increased by 5.7 to 1,150.2 million tons (1,217 million tons in MY 2021/22 and 1,129 million tons in MY 2020/21), in particular for Brazil – by 5 to 130 (116) million tons, while it was left at the level of 37 million tons, although the exchange in Rosario lowered its forecast to 32 million tons.
• The global consumption forecast was increased by 4.88 to 1,160.94 million tons (1,202.9 million tons in MY 2021/22 and 1,143.29 million tons in MY 2020/21).
• The estimate of world exports was increased by 1.65 to 175.44 (204.7) million tons, and world imports – by 1.44 to 175.41 (184.59) million tons.
• The forecast of global ending stocks was raised by 2.06 to 297.41 million tons (306.9 million tons in FY 2021/22 and 293.29 million tons in MY 2020/21).

USDA also released the first corn balance sheet for MY 2023/24. An increase in production, domestic consumption, exports and ending stocks in the US will significantly affect the corn balance in the new season. The US market share will increase slightly, albeit below the 5-year average.

• In the May report, the global production forecast was increased compared to the previous season by 6% to a record 1,219.63 million tons, primarily for the United States – by 11% or 39 million tons to a record 387.75 million tons due to an increase in planted areas and yields, for Argentina – by 17 to 54 million tons, the EU – by 11.33 to 64.3 million tons thanks to the recovery of production after the drought. At the same time, the harvest forecast for Ukraine was reduced by 5 to 22 million tons, for Brazil – by 1 to 129 million tons.
• The global consumption forecast has been raised to a record 1,204.14 million tons (1,160.94 million tons in MY 2022/23, 1,202.9 million tons in MY 2021/22, and 1,143.29 million tons in MY 2020/21) due to increased imports against the background decrease in world prices.
• The estimate of world exports was increased to 195.26 million tons (175.44 million tons in 2022/23 MY and 204.7 million tons in 2021/22 MY), in particular for Argentina – by 15.5 to 40.5 million tons, the USA – by 8.25 to 53.34 million tons, Brazil – by 2 to 55 million tons, while for Ukraine it was reduced by 9 to 16.5 million tons due to a reduction in production. Brazil will become the world’s largest corn exporter for the second consecutive season, despite the recovery of exports from the United States.
• The estimate of world imports was increased to 184.5 (175.41 and 184.59) million tons, in particular for China – by 5 to 23 million tons, Egypt – by 1.5 to 8.5 million tons, Vietnam – by 1 .2 to 11 million tons, Algeria – by 0.8 to 4.8 million tons, while it was reduced for the EU – by 4.5 to 20 million tons, Turkey – by 0.7 to 1.8 million tons.
• Forecast of global ending stocks increased to 312.9 million t (297.41 million t in FY 2022/23, 306.9 million t in MY 2021/22 and 293.29 million t in MY 2020/21) due to increased stocks in the US, which partially offsets their decrease in Brazil and China.

Despite bearish reports, July corn futures in Chicago rose 0.7% to $230.8/t, while December futures fell 1% to $200.3/t, losing 11% and 11.4% for the month % respectively.

Tags: corn, USDA Report