USDA experts have not reduced the forecasts of corn production in Brazil and Argentina, which was a surprise to traders

The traders focused on the data of the global corn balance for 2023/24 MY, where the forecast of corn harvest in Brazil and Argentina was expected to be significantly lower, which would also affect the balance of the new season. However, USDA experts remain optimistic about the harvest in South America.

In the global corn balance for 2023/24 MY, USDA did not change the forecast of global corn production, leaving it at 1228.1 mln tonnes. The forecasts for Brazil remained at 122 mln tonnes, and for Argentina – at 51 mln tonnes, while the average market expectations were lower – at 121 mln tonnes and 50.9 mln tonnes, respectively.

Also in the balance sheet for this season, corn export estimates were increased by 1.73 million tons to 199.11 million tons, and consumption forecasts were increased by 1.03 million tons to 1216.95 million tons, which will increase initial stocks for the new season by 0.69 million tons to 312.39 million tons against 300.94 million tons last season.

Compared to the May balance sheet, the new corn balance sheet for 2024/25 MY has not changed significantly: – The estimate of beginning stocks is reduced by 0.69 million tons to 312.39 million tons (300.94 million tons in 2023/24 MY).

– The forecast of world production is increased by 0.61 million tons to 1220.54 million tons (1228.1 million tons in 2023/24 MY), in particular for Ukraine by 0.7 million tons to 27.7 million tons (31 million tons in 2023/24 MY), which compensates for the reduction in Russia by 0.6 million tons to 15.4 million tons (16.6 million tons). – The estimate of global consumption is increased by 1.41 million tons to 1222.16 million tons (1216.65 million tons in 2023/24 MY), taking into account the growth of consumption in Ukraine (+0.2 million tons), the EU (+0.1 million tons) and Southeast Asia (+0.15 million tons).

– The forecast for world exports is increased by 0.65 million tons to 191.75 million tons (199.11 million tons in 2023/24 MY), in particular for Ukraine by 0.5 million tons to 24.5 million tons (26 million tons), but decreased for Russia by 0.2 million tons to 5 million tons (6 million tons). Export forecasts for the US, Brazil, and Argentina are left unchanged.- World imports are raised by 1.79 million tons to 186.16 million tons (186.58 million tons).

– The ending stocks estimate was lowered by 1.5 million tons to 310.77 million tons (312.39 million tons in 2023/24 MY).

After the publication of the report, July corn futures on the Chicago Board of Trade increased by 1% to 178.8 $/t (-3.4% compared to the data after the report in May), and December corn futures – by 0.8% to 184.5 $/t (-5%). However, in general, the rather bearish corn balance sheets for 2023/24 and 2024/25 MY will put pressure on prices, especially amid improving weather conditions in the US.

Tags: Russia, corn, Brazil, prices, USDA Report, USA, Argentina, crop forecast, Ukraine