EU Corn Imports Plummet

EU corn imports for 2014/15 are forecast to drop over 50 percent (9 million tons) from last year because of a record corn crop and abundant supplies of other feed grains. Feed use of wheat is projected to surge as a larger-than-normal proportion of the record crop is feed-quality, displacing coarse grains in feed rations and further reducing the need for corn imports.

This follows an upward trend in EU corn imports for most of the last 6 years. Elevated global corn prices spurred production, particularly in Ukraine and Brazil, and also triggered a zero EU import duty. Combined with a strong Euro and greater wheat exports, the EU became the world’s largest corn importer in 2013/14.

This year, reduced EU corn imports will drive global trade lower. This in turn will mean intensified competition for exporters. Ukraine, with a freight advantage and nonbiotech corn supplies, has been the EU’s largest supplier in recent years with trade in 2013/14 likely to reach 10 million tons. A second consecutive record U.S. crop will struggle to find export demand, and stocks will build yet again. With abundant supplies in most exporting countries, there will be continued pressure on prices.

OVERVIEW

World corn production in 2014/15 remains a record as larger crop forecasts for the United States, the European Union, and Tanzania more than offset smaller production in Ukraine, Russia, and Belarus. Global trade is down slightly as ample domestic feed grain supplies in the EU displace corn imports. The U.S. season-average farm price is projected slightly lower this month.

For 2013/14, global trade is boosted on higher Egyptian and Iranian imports and strong lateseason shipments from the United States.

PRICES

Since the release of the September WASDE report, U.S. corn export quotes remain largely unchanged at $181/ton, although $13 below the August average. Despite a higher-than-expected September 1 stocks estimate and expectations for a huge crop, U.S. export prices are underpinned by a late harvest, high barge rates, and other logistical problems. The premium of U.S. quotes over South American has remained largely unchanged. Argentine and Brazilian quotes are now $15/ton and $12/ton below U.S., respectively. Black Sea quotes are nearly unchanged at $8/ton below U.S.

TRADE CHANGES IN 2014/15

Selected Exporters

• Canadian corn is halved to 500,000 tons because of a sharply lower carryin as ending stocks data implied higher feed disappearance. (Imports are boosted 200,000 tons to 700,000)

• Russian corn is down 500,000 tons to 3.0 million on a smaller crop.

• Australian barley is cut 400,000 tons to 4.3 million because of reduced exportable supplies.

• EU barley is raised 500,000 tons to 6.5 million based on a larger crop and recent purchases by China.

• Indian barley is tripled to 300,000 tons based on recent trade data and strong global demand. (2013/14 is up 300,000 tons to 500,000)

• Russian barley is up 500,000 tons to 4.3 million because of greater exportable supplies and strong demand.

• Ukrainian barley is raised 200,000 tons to 2.7 million because of a larger crop and strong demand. (2013/14 is up 800,000 tons to 3.5 million.)

• U.S. sorghum is boosted 300,000 tons to 5.3 million on continued strong purchases from China.

Selected Importers

• EU corn is slashed 3.0 million tons to 7.0 million due to sharply larger domestic supplies of feed grains.

• Egyptian corn is up by 1.0 million tons to 7.5 million on strong demand for feed grains.(2013/14 is up 500,000 tons to 8.5 million.)

• Iranian corn is raised 500,000 tons to 5.3 million as a high level of imports is expected to continue. (2013/14 is up 500,000 tons to 5.5 million.)

• Japanese corn is cut 200,000 tons to 15.5 million because of sluggish growth in feed demand as implied by recent trade data. (2013/14 is down 300,000 tons to 15.2 million.)

• Chinese barley is raised by 1.0 million tons to 4.0 million because of strong demand for imported feedstuffs.

• Chinese sorghum is boosted 400,000 tons to 4.3 million because of continued purchases from the United States. (2013/14 is lowered 200,000 tons to 4.3 million.)

TRADE CHANGES IN 2013/14

Selected Exporters- based on trade data

• U.S. corn is up 1.0 million tons to 50.5 million.

• EU corn is raised 200,000 tons to 2.4 million.

• Indian corn is boosted 200,000 tons to 3.9 million.

Selected Importers- based on trade data

• Iranian barley is up 400,000 tons to 900,000.

• Saudi barley is raised 500,000 tons to 8.0 million