OVERVIEW

For 2017/18, global corn production is up from last month led by higher plantings in the United States. Global trade is mostly unchanged from last month. The U.S. season-average farm price is lowered $0.10 to $3.30 per bushel.

For 2016/17, global corn production is up from last month driven by larger production in Argentina. Global trade is down due to smaller expected exports for the United States and Brazil that more than offset greater Ukraine exports. The U.S. season-average farm price is unchanged at $3.35 per bushel.

PRICES

Global corn prices were mostly unchanged from last month’s WASDE amidst typical June price volatility. Although U.S. and South American bids trended downward for the first half of June, prices strengthened since the start of July with the release of the Acreage report (June 30th). Ongoing harvests in South America have pressured Argentine prices to plunge $10/ton, settling at $152/ton. Brazilian quotes were unchanged at $159/ton despite pressure from large supplies. U.S. quotes rose slightly to $165/ton, while Black Sea prices were up to $176/ton on robust global demand.

Spain Drives EU Corn Imports

Within the EU, Spain has been the largest importer of corn from non-member states. While robust feed demand in both the swine and cattle industries continues to drive imports, prospects of smaller barley and corn crops for 2017/18 are expected to boost imports. Recent drought has damaged both the barley crop and pasture conditions for cattle. Barley is a pivotal feed grain for Spain’s swine industry, and cattle depend on healthy pasture for forage. Furthermore, growth in the ethanol and wet-milling industries is expected to stimulate demand for larger corn imports.

Spain’s tariff-rate quota for corn is different from other EU members; the country can import 2 million tons of non-EU corn at zero duty. Spain is deficit feed grains, and imports corn from EU countries (France, Romania, Bulgaria) and non-EU members (Ukraine, Argentina, Brazil, and Serbia). Before 2008/09, Brazil and Argentina were prominent suppliers to Spain; however, Ukraine is now the most significant. The country’s rise has been led by preferential access (i.e. zero duty quota) to the EU market, along with favorable logistics and competitive prices.

For the first four months of 2017, Spain nearly tripled DDGS imports compared with a year ago. At the same time, imports of sorghum almost doubled. DDGS are mostly sourced from the United States while Ukraine provides sorghum supplies. With the largest swine herd in the EU and pork exports at record levels, Spain is expected to continue to lead the EU’s feed grain imports.

TRADE CHANGES IN 2017/18

Selected Exporters

  • Brazilian corn is up 500,000 tons to 33.5 million on expectations that shipments are slated to shift from the previous year. Thus, 2016/17 exports are cut 1.0 million tons to 22.0 million.
  • Argentine barley is cut 300,000 tons to 1.8 million reflecting a smaller crop.
  • EU corn is down 200,000 tons to 2.3 million on lower production and substantial competition.

TRADE CHANGES IN 2016/17

Selected Exporters

  • U.S. corn is cut 1.0 million tons to 55.0 million on expectations of intense competition from South America in the fall.
  • Argentine corn is down 500,000 tons to 26.5 million reflecting slower than expected shipments in June. Barley exports are up 400,000 tons to 2.6 million on stronger sales to Brazil, Colombia, and India.
  • Paraguayan corn is down 200,000 tons to 2.1 million on trade to date.
  • Tanzanian corn is reduced 350,000 tons to 50,000 reflecting the enforcement of the export ban, which has been in place since October 2016.
  • Ugandan corn is lowered 200,000 tons to zero on a decimated crop.
  • Ukrainian corn is up sharply 1.5 million tons to 20.5 million led by robust global demand and recent trade data.
  • Australian barley is boosted 300,000 tons to 9.0 million on larger production and strong Chinese demand.
  • Russian barley is cut 200,000 tons to 3.2 million spurred by a slow pace of shipments.

Selected Importers

  • Bolivian corn is down 200,000 tons to 250,000 on a slower pace from its top supplier, Argentina.
  • Kenyan corn is cut 350,000 tons to 1.1 million on a larger crop. Kenya’s corn trade for 2013/14 onward is revised based on Kenya National Bureau of Statistics data.
  • Venezuelan corn is slashed 700,000 tons to 1.0 million on a worsening economy.
  • Vietnam corn is cut 500,000 tons to 9.0 million reflecting a slower pace of shipments from its major suppliers.
  • Algerian barley is cut 250,000 tons to 650,000 on slower purchases with the implementation of the import license requirement.
  • Chinese barley is boosted 300,000 tons to 6.2 million on continued strong purchases from Australia.
  • Libyan barley is up 200,000 tons to 1.0 million on trade to date.
  • Moroccan barley is trimmed 200,000 tons to 400,000 on slower demand as conditions for pasture improved.