USDA will need to cut corn stocks again in June

Despite a recovery in Argentine sales and the arrival of the Brazilian second crop, the international market continues to buy plenty of US corn. This week, another strong shipment, which brought the accumulated sales for the business year very close to the USDA’s projection for the business year. There are still three months to go until the end of the business year. Therefore, it seems obvious that the Department of Agriculture will need to renew its annual export estimate, cutting final stocks of both the old and new crops. In the meantime, the 2025 crop remains in full condition, with the focus now on pollination in July, a decisive phase for production. The international corn market is largely focused on the strong 2025 US harvest that is taking shape. Planting has been done at record speed, reaching 87% last week, compared to the historical average of 85%. Earlier planting could potentially generate high yield estimates. However, weather events in July and August that could compromise these potentials cannot be ruled out. Planting well is a great start, but harvesting wellis the guarantee of production. We still have ninety days of weather in the US Midwest to determine the trajectory of the 2025 season.

Sections of the Northern Hemisphere, such as Russia and Germany, have been experiencing an extremely hot spring, and we should consider this possibility for the US and Canadian summers as well. For now, July suggests slightly above-average temperatures for the Midwest, but with rain. The seasonal climate challenge will continue into 2025.

Meanwhile, a fundamental piece of information remains a key point in the short term, namely, as we have routinely pointed out in our editions, the strong weekly US exports. May closed with another week of sales of nearly one mln tons, now accumulating 64.2 mln tons three months before the end of the business year. USDA projected 66 mln tons of total sales in the business year. Therefore, it is more than clear that there is a need for a new upward adjustment in the projected exports for the year, even if weekly sales settle down from now on.

A cut in old crop stocks should also indicate a cut in the projection of new crop stocks, if USDA does not cut demand for the next business year. In this June report, USDA does not change the projected area and/or productivity. Therefore, after the cut in stocks in this report, the next key data is the area planted on June 30. At this point, due to the negative effect of tariffs on the decisions of US producers to plant soybeans, it is possible that we will have a record US corn acreage area this year. From then on, the weather in July becomes the final data for the 2025 crop due to pollination.

The increase in exports from Argentina, based on the harvest progress, is a point that should divide this global demand in June a little more with the United States. Starting in July, the record Brazilian second corn crop will come, which promises to really take away export demand from the United States in the second half of the year.

Tags: shipment, corn, USDA, Brazil, US, Production, stocks, Market, Argentina