Highlights

Post has increased the marketing year (MY) 2016/17 corn production estimate based on expectations for a strong crop this year. This in turn will reduce corn imports. Sorghum production is down slightly this year, but is expected to increase in MY 2017/18. Rice import and export estimates for MY 2016/17 have been increased based on increased one-time sales to Venezuela. Wheat estimates remain unchanged from the USDA/Official estimates.

CORN

Production:

The corn production estimate for MY 2016/17 has been revised upward from the USDA/Official estimate to 27.4 million metric tons (MMT), reflecting the preliminary final results of the 2016 spring/summer crop from Mexico’s Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Foodstuffs (SAGARPA). Very favorable weather conditions during critical phases of the crop cycle resulted in greater yields than previously estimated and diminished the total area damaged compared with previous years. During this crop cycle the total area damaged was only 154,157 hectares (ha), compared to the average of 460,000 ha in the last few years. In addition and based on official information as of May 31, 2017, the 2016/17 fall/winter crop harvest is expected to be better than previously anticipated. If the current favorable weather conditions continue throughout this season, the expected yield levels will be higher than previous estimates. Post/New production and harvested area forecasts for MY 2017/18 have remained unchanged form USDA/Official figures.

Consumption:

The Post/New feed and residual corn consumption estimate for MY 2016/17 has been revised downward from USDA/Official data, based on updated information from SAGARPA.Feed consumption is expected to increase less than previously estimated. The market for poultry, pork, and beef meats in Mexico could weaken in 2017 compared to recent history, largely because of reduced consumer purchasing power that the higher domestic inflation could cause. In the first months of 2017, the balance of inflation risks has shown some deterioration. Mexico’s inflation rate rose more than any analyst had expected in April 2017, reaching almost 6 percent, which is practically double the official target rate, after gasoline prices surged and the peso weakened.

Weak demand for (mainly imported) yellow corn compared to the USDA/Official estimate. At the same time, and as a result of the higher inflation rate, last May Mexico’s central bank unexpectedly raised its key interest rate for a sixth straight meeting to keep the increase in consumer prices from worsening. The inflation registered in 2016 was 2.9 percent.

Trade:

The Post/New total corn import estimate for MY 2016/17 has been revised downward from USDA/Official data to 14.0 MMT. The revised data reflects the updated official information from SAGARPA and the General Customs Directorate of the Finance Secretariat (SHCP) for the first seven months of this marketing year. In addition, the private traders stated Mexican feed grains importers likely will opt to acquire more domestic corn instead of imported corn, due to the higher-than-previously-estimated domestic production.

Corn

Corn. Market Begin YearOct 2015Oct 2016Oct 2017
MexicoUSDA OfficialNew PostUSDA OfficialNew PostUSDA OfficialNew Post
Area Harvested720772077500750071507150
Beginning Stocks409040905213521364136413
Production259712597127000274002500025000
MY Imports140111401114800140001550015500
TY Imports140111401114800139001550015500
TY Imp. from U.S.1360313603013600015350
Total Supply440724407247013466134691346913
MY Exports15591559700700700700
TY Exports15591559700700700700
Feed and Residual203002030022000216002270022700
FSI Consumption170001700017900179001800018000
Total Consumption373003730039900395004070040700
Ending Stocks521352136413641355135513
Total Distribution440724407247013466134691346913
Yield

SORGHUM

Production:

The Post/New total sorghum production and harvested area estimates for MY 2016/17 have been revised downward from USDA/Official estimates, based on final official data from SAGARPA. These statistics include final results of the 2016 spring/summer crop cycle as well from available information as of May 31, 2017, for the 2016/17 fall/winter crop cycle. For MY 2017/18, the production and harvested area estimates have been revised upward and downward, respectively, reflecting the most recent planting intentions information available from official sources. After a three-year sugarcane aphid (SCA) outbreak, the campaigns implemented by farmers and phytosanitary authorities to control and mitigate this pest have been relatively successful. These campaigns, along with the use of new and better hybrid seed varieties that are more resistant to SCA, have allowed farmers to reverse the yield reductions caused by the pest in states such as Tamaulipas and some areas of the “Bajio” region (Guanajuato, Michoacan and Jalisco).

Consumption:

For MY 2017/18, the total consumption estimate has been revised upward compared to the USDA/Official figure based on information from private sources, who indicate that higher domestic production could generate attractive prices for the livestock sector in this marketing year. The total sorghum consumption estimate for MY2016/17 has been decreased from the USDA/Official estimate based on information obtained from SAGARPA and industry contacts. They stated that lower domestic production than was previously anticipated would increase domestic sorghum prices further, provoking a decrease in animal feed demand.

Trade:

The Post/New sorghum import estimate for MY2016/17 has been revised upward from the USDA/Official estimate to 750,000 MT, based on preliminary official data from SAGARPA and SHCP for the first seven months of this marketing year.

Stocks:

Ending stocks for MY2016/17 have been revised downward from the USDA/Official estimate, due to lower-than-previously estimated production. This was reflected in the carry over for MY2017/18, which was also adjusted downward.

Sorghum

2015/2016

2016/2017

2017/2018

Market Begin Year

Oct 2015

Oct 2016

Oct 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

1678

1678

1480

1450

1700

1600

Beginning Stocks

338

338

286

286

286

186

Production

5587

5587

5400

5050

6000

6200

MY Imports

661

661

700

750

500

500

TY Imports

661

661

700

750

500

500

TY Imp. from U.S.

661

661

0

750

0

500

Total Supply

6586

6586

6386

6086

6786

6886

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

6200

6200

6000

5800

6300

6400

FSI Consumption

100

100

100

100

100

100

Total Consumption

6300

6300

6100

5900

6400

6500

Ending Stocks

286

286

286

186

386

386

Total Distribution

6586

6586

6386

6086

6786

6886

Yield

3.3296

3.3296

3.6486

3.4828

3.5294

3.875

RICE

Production:

Total rice production and harvested area estimates for MY 2017/18 have been revised slightly downward from USDA/ Official estimates, based on updated official data from SAGARPA as of May 31, 2017. Recently, SAGARPA published the farmer planting intentions for the 2017 spring/summer crop cycle, which shows a slightly smaller-than-previously-estimated planted area, and consequently a lower production level. Similarly, the production and area harvested estimates for MY 2016/17 have been revised slightly downward, reflecting preliminary final official figures from SAGARPA.

Trade:

Mexico's total rice import estimate for MY 2016/17 has been revised upward to 860,000 MT, or 7.5 percent above the USDA/Official estimate, reflecting official data from SAGARPA and SHCP for the seven first months of this marketing year. Similarly, the export estimate for MY 2016/17 has been adjusted upward to 60,000 MT, based on the same official data. Mexico’s higher imports of paddy rice (mainly from the United States) in this marketing year have been driven by exports of milled rice to Venezuela. However, trade sources agree that the impressive increase in exports to this South American country (compared with previous years) should be considered a one-time occurrence. Trade sources noted Mexican millers saw a short-term business opportunity to ship large volumes to Venezuela at attractive prices for a few months of this marketing year. Reportedly, the Venezuelan government has been looking to import rice with preferential dollar exchange rates in the last few months.

Stocks:

The Post/New ending stocks estimate for MY2016/17 has been revised upward to 208,000 MT as result of higher-than-originally-estimated imports, which was reflected in the carry over for MY2017/18.

Rice, Milled2015/20162016/20172017/2018
Market Begin YearOct 2015Oct 2016Oct 2016
MexicoUSDA OfficialNew PostUSDA OfficialNew PostUSDA OfficialNew Post
Area Harvested404041404340
Beginning Stocks165165127127167208
Milled Production156156190181199197
Rough Production227227277263290287
Milling Rate (.9999)687068706870687068706870
MY Imports693693800860800800
TY Imports731731800860800800
TY Imp. from U.S.64764707600755
Total Supply101410141117116811661205
MY Exports22506022
TY Exports22505222
Consumption and Residual885885900900910910
Ending Stocks127127167208254293
Total Distribution101410141117116811661205
Yield (Rough)5.6755.6756.75616.5756.74427.175