OVERVIEW

For 2016/17, global corn production is raised to a record with larger crops in Argentina, India, and the United States more than offsetting reductions for Canada and the EU. U.S. production is forecast up based on a record yield. Global trade is higher with larger projected imports for Brazil, Canada, the EU, Mexico, and the United States and smaller imports for Indonesia. Forecast exports are raised for Argentina and the United States, but lowered for Brazil and the EU. The U.S. season-average farm price is forecast 25 cents lower to a midpoint of $3.15 per bushel.

For 2015/16, global corn production is nearly unchanged as larger crops for the EU and South Africa offset a reduced crop in Brazil. Trade is up slightly with larger imports for Brazil, Mexico, and the United States more than offsetting a reduction for Indonesia. Exports are raised for Canada, Ukraine, and the United States, but lowered for Argentina. The U.S. season-average farm price is lowered 5 cents to a midpoint of $3.60 per bushel.

SELECTED COUNTRIES: SUPPLY AND DEMAND CHANGES

Argentina's 2016/17 corn production is now forecast at a record 36.5 million tons, up 2.5 million tons from last month. Based on the projected abundant supplies, 2016/17 marketing year (Mar 2017-Feb 2018) exports are forecast up 1.0 million tons to a record 24.0 million. Argentina's trade year (Oct 2016-Sep 2017) exports, which only partially overlap with its marketing year, are projected 500,000 tons higher to a record 23.5 million tons. Additionally, corn feeding is forecast up slightly and ending stocks are projected to grow. Beginning stocks for 2016/17 are also projected higher based on a reduced forecast for 2015/16 exports. Argentina's forecast exports for 2015/16 (both marketing and trade year) are reduced based on a relatively slow pace of exports and competition from lower-priced U.S. corn.

Coming off a drought year, Indian corn production for 2016/17 is forecast to rebound to 24.5 million tons, up 1.5 million from last month. With a projected record crop, 2016/17 imports are halved to 100,000 tons, while exports are raised slightly to 700,000 tons. With relatively high internal prices, exports are expected to be uncompetitive. Feed use is forecast to be higher with continued strong demand from the poultry sector. Ending stocks are expected to rebound.

Indonesia depends on corn imports to satisfy feed demand. For 2016/17, corn imports are lowered 800,000 tons to 2.2 million due to a lack of Ministry of Trade regulations for the administration of import licenses, creating uncertainty for importers, as well as a plan to eliminate all corn imports. With lower projected imports, feed use is forecast to be lower, but still up from the prior year. Indonesia's 2015/16 imports were similarly reduced by 1.0 million to 2.1 million, also lowering feed use. For both years, some of the reduction in corn use will be offset by larger imports of feed-quality wheat.

PRICES

Since the release of the July WASDE report, FOB quotes for South American exporters rose slightly. Brazil's quotes are up $13/ton to $190 based on further reductions in reported second crop yields and strong domestic demand. Argentina's quotes are up $7/ton to $181 based on delays in harvesting and exporting its crop. Black Sea quotes are down $2/ton to $198. U.S. quotes remain the most competitive at $167/ton, pressured by favorable crop ratings and expectations for a higher yield.

TRADE CHANGES IN 2016/17

Selected Exporters

  • U.S. corn is boosted 3.0 million tons to 55.0 million reflecting competitive prices on larger projected supplies as well as reduced competition from Brazil.
  • Argentine corn is up 500,000 tons to 23.5 million on greater supplies.
  • Brazilian corn is slashed 1.0 million tons to 19.5 million based on a reduced crop and strong domestic demand.
  • EU corn is cut 500,000 tons to 2.0 million on a smaller crop.
  • Indian corn is up 200,000 tons to 700,000 on increased supplies.
  • Australian barley is boosted 200,000 tons to 6.2 million with a larger projected crop.
  • EU barley is slashed 1.0 million tons to 8.0 million on a reduced crop. Imports are raised 200,000 tons to 300,000 reflecting the fast pace of import licenses issued.
  • Kazakhstan barley is boosted 200,000 tons to 900,000 on greater supplies.
  • Russian barley is up 800,000 tons to 4.8 million with a larger crop and expected strong demand from the Middle East and North Africa.
  • Ukrainian barley is raised 500,000 tons to 4.5 million on greater supplies.
  • U.S. sorghum is up 800,000 tons to 6.3 million on larger supplies and reduced competition from Argentina and Australia.
  • Argentine sorghum is reduced 300,000 tons to 800,000 on a smaller crop.

Selected Importers

  • U.S. corn is raised 250,000 tons to 1.3 million on expectations of continued demand for organic corn.
  • Brazilian corn is boosted 400,000 tons to 1.1 million on tightening supplies.
  • Canadian corn is raised 500,000 tons to 1.5 million to offset a smaller projected crop.
  • EU corn is up 1.0 million tons to 12.0 million to partly offset reduced barley feeding.
  • Indonesian corn is lowered 800,000 tons to 2.2 million reflecting delays in issuance of licenses and permits.
  • Mexico corn is raised 500,000 tons to 13.5 million on expected feed demand.
  • Moroccan barley is up 300,000 tons to 1.0 million on expectations of continued demand.
  • Chinese sorghum is up 500,000 tons to 5.5 million reflecting continued demand.

TRADE CHANGES IN 2015/16

Selected Exporters

  • U.S. corn is raised 1.0 million tons to 49.5 million reflecting continued robust sales and shipments.
  • Argentine corn is lowered 1.5 million tons to 19.0 million due to the slow pace of shipments.
  • Canadian corn is raised 650,000 tons to 1.7 million on trade to date.
  • EU corn is boosted 200,000 tons to 1.8 million on trade to date.
  • Ukrainian corn is up 400,000 tons to 16.4 million on trade to date.
  • EU barley is raised 400,000 tons to 10.3 million on trade to date.
  • Ukrainian barley is boosted 400,000 tons to 4.2 million on strong demand from North Africa and the Middle East.
  • U.S. sorghum is up 400,000 tons to 8.2 million on steady demand from China.

Selected Importers

  • Brazilian corn is boosted 600,000 tons to 1.8 million due to tightening supplies.
  • Indonesian corn is lowered 1.0 million tons to 2.1 million based on import restrictions.
  • Mexican corn is up 500,000 tons to 13.5 million on the continued fast pace of purchases from the United States.
  • Algerian barley is boosted 300,000 tons to 900,000 with larger purchases from the EU.
  • Chinese sorghum is up 400,000 tons to 7.2 million on trade to date.