The European Commission again lowered the production forecast and increased the forecast of corn imports to the EU
In view of the long drought, the experts of the European Commission reduced the forecast of corn production in the EU in 2022/23 MR to 65.8 million tons, which would be 5.9 million tons less than the June estimate, 7 million tons less than last season and 4% less than the average 5-year level. France, Romania and Germany may have harvests lower than the 5-year average due to the lack of rainfall that has continued since the spring.
As a result, the forecast of corn imports to the EU was increased by 1.5 million tons to 16.5 million tons, which will correspond to the level of 2021/22 MR, and the estimate of final stocks was reduced by 5.3 million tons to 15.6 million tons (20, 6 million tons in 2021/22 MR).
The forecast of the soft wheat harvest in the EU in 2022/23 MR has also been reduced compared to June estimates by 1.1 million tons to 123.9 million tons (130.1 million tons in 2021/22 MR). Accordingly, the forecast for wheat exports from the EU has been reduced by 2 million tons to 36 million tons, which will significantly exceed the 29 million tons exported in 2021/22 FY. Ending stocks are expected to decrease compared to the previous season by 3.1 million tons to 13.7 million tons.
Dry and hot weather is expected in the main European corn-growing regions in the coming weeks, which will continue to worsen the condition of crops already affected by the heat wave in early July.
Due to the reduction in production, the European Union will be forced to increase the import of corn, in particular from Ukraine, which is the main supplier and has been actively exporting grain through the western border since the beginning of the war.
Due to a sharp drop in demand prices from the spring level of 260-300 $/t to 200-270 $/t DAP Romania and Poland, as well as against the background of logistical difficulties, Ukrainian farmers reduced the volume of corn sales to the EU, especially in anticipation of the opening of grain corridors from the ports of Black sea.
November corn futures on Paris Euronext rose 8.7% during the week to €328.25/t or $336/t, adding 15.6% to the price for the month.
October Black Sea corn futures in Chicago were up just 2.2% on the week to $322/t, nearly matching last month’s level, as corn harvest forecasts in Ukraine were downgraded due to lack of rainfall.
December corn futures in Chicago for the week rose 9.7% to $244/t, recovering to last month’s level.
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