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OVERVIEW FOR 2017/18

Global production is forecast to fall from last year’s record driven by smaller crops across all coarse grains – corn, barley, sorghum, oats, and rye. Nevertheless, global consumption is expected to rise moderately as greater use of corn is expected to supplant demand for other coarse grains, particularly in Asia and MENA (Middle East and North Africa). An insatiable appetite for low-priced feed grains is expected to grow, driven by economic growth and rising populations. Reduced production coupled with greater consumption is expected to drawdown global ending stocks from last year’s record.

Global corn production is projected down from last year’s record largely due to reduced crops in the United States and China. Global consumption is set to outpace production as large beginning stocks is projected to make corn a very affordable feedstuff. Competitive prices and projected record supplies in South America are expected to boost global trade year-over-year. Global ending stocks are projected to fall for the first time since 2010/11, primarily driven by China, where the government actively promotes the use of domestic corn for feed and industrial purposes.

World barley production is expected to drop significantly with reduced crops for Australia, Canada, Kazakhstan, and Ukraine. Australia’s 2017/18 crop is expected to return to normal conditions after a record harvest the preceding year. Global trade is forecast lower with less exportable supplies and prospects for higher prices. Saudi Arabia will continue as the world’s largest importer; China is the second largest, importing for both feed and malting purposes. Smaller global imports are expected to be led by subdued demand in China, where competitively priced domestic supplies are expected to limit feed grain imports.

Global sorghum production is forecast lower as declines for Argentina, India, and the United States more than offset gains for Australia, Burkina Faso, Ethiopia, and Mexico. Global trade is forecast lower on reduced demand in China, the top importer, along with relatively tighter supplies in exporting countries.

HIGHLIGHTS FOR 2017/18

Selected Exporters

  • U.S. corn is projected to sharply fall 8.5 million tons to 47.5 million on expected strong competition from Argentina and Brazil. Sorghum is forecast down 600,000 tons to 5.2 million with the expectation of softening demand in China, a top destination.
  • Argentine corn is projected up 1.0 million tons to a record 27.0 million on a large crop. Since the removal of quantitative restrictions in late 2015, exports have remained strong, and producers continue to favor sales over keeping corn in storage.
  • Brazilian corn is forecast up 10.0 million tons to 33.0 million on large supplies. With relatively abundant domestic supplies, imports are expected to fall 1.9 million tons to 300,000.
  • EU corn is projected up 500,000 tons to 2.5 million while imports are boosted 900,000 tons to 14.0 million as a result of abundant supplies from Ukraine and South America. Barley exports are forecast up 1.6 million tons to 7.0 million reflecting a larger crop and expectations of robust demand from Spain with diminished winter crop prospects.
  • Ukrainian corn is forecast up 1.0 million tons to 20.0 million on expected growth in the Middle East and North Africa as well as the EU. The country’s export capacity is expected to strengthen with additional investment in logistical infrastructure and growing number of import markets. Barley exports are projected to plunge 1.9 million tons to 3.6 million on smaller crop prospects.
  • Russian corn is forecast up 200,000 tons to 5.5 million with expected robust demand from traditional markets in the Middle East and the EU, as well as growing markets in East Asia. Barley is forecast up 200,000 tons to 3.6 million on continued strength in demand from Middle East buyers.
  • Australian barley is forecast to plummet 2.7 million tons to 6.0 million on a smaller expected crop, as the preceding harvest broke records for both production and yield.

Selected Importers

  • Chinese corn is forecast at 3.0 million tons, the same as a year ago, reflecting the Tariff Rate Quota allotted for the private sector under China’s WTO commitments. Imports for both barley and sorghum are projected to fall sharply with tighter global supplies. The government’s effort to promote the use of domestic corn is expected to limit import demand. Barley imports are forecast down 1.4 million tons to 4.5 million, while sorghum imports are forecast down 500,000 tons to 4.2 million.
  • Bangladesh corn is projected to increase 100,000 tons to 1.1 million on robust demand from both the poultry and aquaculture sectors. Corn consumption has witnessed continuous robust growth recently. Bangladesh’s major suppliers include India, Ukraine, the United States, and Brazil.
  • Egyptian corn is forecast up 1.0 million tons to a record 10.0 million on continued growth in feed demand for the poultry sector. Egypt is expected to lead feed demand growth in North Africa.
  • Iranian corn is forecast up 500,000 tons to a record 9.0 million with strong feed demand.
  • Mexican corn is projected up 700,000 tons to a record 15.5 million on growing feed demand for the livestock sector. Mexico depends on imports of yellow corn for feed use, while the domestic crop, primarily white corn, is used for food. Sorghum imports are expected to fall 200,000 tons to 500,000 on a projected larger crop.
  • South Korean corn is projected 400,000 tons higher to 10.2 million with abundant global corn supplies supplanting demand for feed-quality wheat.
  • Vietnamese corn is projected up 1.0 million tons to a record 10.5 million on prospects for continued growth in feed use for the livestock and aquaculture sectors.
  • Saudi barley is forecast down 1.0 million tons to 10.0 million, while corn is forecast up 800,000 tons to a record 4.5 million. Stronger demand for corn is expected to mostly offset reduced imports of feed barley.

OVERVIEW FOR 2016/17

2016/17 global corn production is higher this month on forecast record crops for Argentina and Brazil. Global trade is up with larger imports for Kenya and Bangladesh. Bangladesh is a new addition to the database, and is projected to import 1 million metric tons to support its thriving poultry and aquaculture industries. Exports for both Argentina and Brazil are forecast at new records. The 2016/17 season-average farm price is unchanged from last month’s estimate at $3.40 per bushel.

The 2017/18 season-average farm price is projected between $3.00 and $3.80 per bushel, unchanged to the midpoint from the current 2016/17 estimate.

PRICES

Global corn prices are mostly unchanged from last month with prospects for larger crops in South America. Competitvely priced Brazilian quotes entered the scene this month, ending at $156/ton. Argentine prices experienced unusual volatility ending at $161/ton, dropping $4/ton on prospects for ample supplies. Black Sea prices remain flat at $170/ton, while U.S. quotes continue to be competititvely priced at $157/ton. However, from June onward, prospects of competitive U.S. pricing are projected to weaken.

TRADE CHANGES IN 2016/17

Selected Exporters

  • U.S. corn is down 500,000 tons to 56.0 million on prospects for stronger competition this summer from South America.
  • Argentine corn is up 500,000 tons to 27.0 million reflecting improved competitiveness and record port shipments during the month of April.
  • Brazilian corn is up 500,000 tons to 23.0 million on expected competitiveness this JunSep boosted by abundant supplies from the safinha crop, which will start to be harvested in a few weeks.
  • Ukrainian corn is boosted 300,000 tons to 19.0 million on account of sales to Kenya where imports of yellow corn are required to be non-GMO.
  • Australian barley is raised 600,000 tons to 8.7 million with robust demand from China and with competitive prices.

Selected Importers

  • Kenyan corn is up 450,000 tons to 1.5 million reflecting government measures to mitigate the impact of drought on the domestic market.
  • Turkey corn is cut 500,000 tons to 1.0 million reflecting a slow recovery in the poultry sector; poultry producers purchase corn at zero duty under the Inward Processing Regime. Otherwise, corn imports are assessed a 130 percent duty.
  • Chinese barley is boosted 500,000 tons to 5.9 million reflecting large purchases in recent months from Australia. Sorghum is boosted 200,000 tons to 4.7 million on relatively strong purchases from the United States.
57 Commodity exchange

Australian grains industry at AGIC 2017