OVERVIEW

There are few changes this month for the 2017/18 global corn use. Corn production is up marginally with gains for China, the European Union, Laos, and Guatemala more than offsetting a reduction for Russia. Global corn trade is mostly unchanged. The U.S. season-average farm price remains unchanged at $3.20 per bushel.

PRICES

Global corn prices trended upward from last month’s WASDE mainly amid weather concerns and seasonality. Argentine bids surged $10/ton to $156 and Brazilian bids were up $5/ton to $161 with tight nearby supplies. Black Sea bids were unchanged at $164. U.S. quotes dropped slightly ($1/ton) to $156.

U.S. Sorghum Sales Bode Well for 2017/18 Exports

From September to November in 2017/18, U.S. sorghum sales totaled about 2.0 million tons or one-third of the export forecast reflecting strong overseas demand. Sales to reported destinations are up substantially from a year ago, driven by China, while sales to “Others” are mainly comprised of undeclared destinations and are up modestly from last year.

Most U.S. sorghum is destined to feed-deficit southern China, where animal production is concentrated and feed demand runs high. The uptick in sales indicates a need for competitivelypriced alternative feedstuffs as domestic corn prices, in both the surplus North and deficit South, remain higher than world market prices. Unlike corn, sorghum imports are neither subject to tariff-rate quotas, nor have any biotech varieties.

Meanwhile, the uptick in sales leaves little room in the U.S. sorghum balance sheet with the forecast of tight ending stocks. In March, the USDA Prospective Plantings report will give an indication of how U.S. producers will respond to these market dynamics.

TRADE CHANGES IN 2017/18

Selected Exporters

  • U.S. sorghum is boosted sharply by 1.3 million tons to 6.7 million on strong sales and shipments primarily to China. Accordingly, China’s sorghum imports are raised 1.3 million tons to 6.3 million.
  • EU corn is raised 500,000 tons to 2.0 million on expectations for Romania to replace Russia’s trade to Vietnam, Turkey, and Lebanon.
  • Russia corn is cut 500,000 tons to 5.0 million on lower production based on reported harvest results to date.

Selected Importers

  • Brazil corn is up 400,000 tons to 700,000 reflecting strong imports during October and November from Paraguay to southern Brazil.