2019/20 OVERVIEW

Global coarse grain production is projected to rise, driven by corn, barley, oats, and rye.

Global corn production is projected to expand, with record crops for Argentina, Canada, Brazil, Egypt, India, and Indonesia; and near-record crops for the European Union and Ukraine. For the United States, projected larger planted area in the March Prospective Plantings report and a trend yield are expected to result in a near-record crop. For other countries, area expands on expectations of favorable market prospects relative to other crop options. Global trade expands as importing countries seek competitively priced feedstuffs to satisfy rising needs. Consumption grows, outpacing production for the third year in a row, supported by feed demand for poultry sectors throughout the world. Moreover, stronger demand in China for processing boosts food, seed, and industrial usage at the global level. As a result, global ending stocks are projected to decline modestly.

Global barley production is projected to rise to its largest level since 2008/09 driven by Canada, the European Union, Russia, and Ukraine. The Canadian crop reaches its largest level in 6 years (since 2013/14) with expanded area, while production for the others returns to more historical levels. Global trade expands moderately, supported by stronger import demand primarily for Morocco and Saudi Arabia. The lack of rainfall in Morocco earlier in 2019 has impacted both barley and forage production. Saudi Arabia’s concern over water availability favors wheat production over forage crops. Tighter supplies of forage in both countries are expected to boost barley imports. With only moderate growth in global consumption for food, seed, industrial, and feed use, ending stocks are projected to rebound after 2 years of decline.

Global sorghum production is projected down as a sharp decline in the United States more than offsets larger crops for Australia, China, India, and Mexico. The decline in the U.S. crop is driven by a smaller area, the lowest since 2011/12. Global trade is expected to fall moderately, reflecting weak demand in China and availabilities of other competing feed grains, namely corn and barley (and feed-quality wheat). Global ending stocks fall to the lowest level since 2006/07.

World oats production is also projected higher, with gains in Australia, Canada, the European Union, and Russia. Canada’s production rises due to a decline in canola area and relatively favorable prices. Global consumption is forecast up led by the European Union. Global trade is projected larger with higher imports for China and the United States. Global ending stocks are forecast to rebound after hitting a historical low in 2018/19.

Selected Importers

  • China corn is projected up 2.0 million tons to 7.0 million on expectations of stronger demand for competitively priced feedstuffs. Domestic corn prices in southern China have strengthened in recent months, while prices in the world market have declined on supply pressure. Barley imports rise 500,000 tons to 7.0 million on greater use for food, industrial, and feed purposes. Sorghum is projected at 700,000 tons, the same level as 2018/19, under the assumptions that the underlying commercial risks and retaliatory duty (25 percent) on U.S. sorghum limit trade prospects.
  • Egypt corn is projected up 300,000 tons to 10.0 million with stronger feed demand for poultry, dairy, and aquaculture. Moreover, new feed mills have come onto operation in 2018/19 producing corn-based poultry and dairy feed.
  • European Union corn is expected down 3.5 million tons to 20.0 million, reflecting abundant domestic supplies of corn, barley, and wheat for feed. Feed demand in the European Union is expected to be strong, supported by Chinese demand for pork imports. FSI corn use will see modest gains in biofuels, starch, and other industrial products.
  • Indonesia corn is halved to 400,000 tons on expectations of a record crop. Feed use continues to grow steadily, and larger planted area and improvements in yield will push the country closer to realizing its goal of corn self-sufficiency.
  • Iran corn is expected to rise 1.0 million tons to 10.5 million on growing feed demand. The country has been a key market for Brazil, Russia, and Ukraine.
  • Japan corn is expected to rise 100,000 tons to 15.6 million on very modest growth in FSI use, mainly driven by the beverage sector. Feed demand is expected to remain flat.
  • Kenya corn is projected up 1.1 million tons to 1.3 million to offset a substantially smaller crop. The import ban on biotech corn and preference for white corn limits potential purchases from neighboring countries and Mexico.
  • Mexico corn is projected up 1.0 million tons to a record 18.5 million on growing feed demand for the poultry, swine, and cattle sectors. The country predominantly produces white corn, which is mainly used for food and exports, while importing yellow corn for feed use.
  • Morocco barley is up 900,000 tons to 1.2 million reflecting a smaller crop impacted by the lack of rain during the growing season early in 2019. The harvest season for barley is MayJuly.
  • Saudi Arabia barley is forecast up 900,000 tons to 8.5 million, while corn is expected to rise 500,000 tons to 5.5 million. With concerns over water availability, the country favors food crop (i.e. wheat) production over forage crops. Imported barley and corn substitute for limited supplies of forage in feed rations.
  • South Korea corn is projected up 300,000 tons to a 10.5 million on modest growth in feed demand for the poultry and swine sectors.
  • Turkey corn is expected to rise 500,000 tons to 2.7 million on growing feed demand. The feed sector has steadily expanded over the past 10 years and is expected to continue growing, driven by demand for ruminant and poultry feed. Barley is forecast down 200,000 tons to 100,000 with a projected record crop.
  • Vietnam corn is up 500,000 tons at 10.5 million under expectations of growth in poultry and aquaculture feed use, more than offsetting uncertain prospects in the swine sector.

Selected Exporters

  • U.S. corn is projected unchanged at 58.0 million on expectations of strong competition from Argentina, Brazil, and Ukraine, where exportable supplies are abundant. Sorghum is forecast down 100,000 tons to 2.5 million reflecting the current trade tensions with China and plentiful supplies of corn, the major competing feed grain.
  • Argentina corn is projected to surge 4.0 million tons to a record 32.0 million on a record crop. Large exportable supplies and competitive prices bode well to meet rising demand for feed in the Middle East, North Africa, and Southeast Asia. Barley is projected down 400,000 tons to 2.7 million on smaller exportable supplies.
  • Australia barley is forecast up 500,000 tons to 5.0 million on a larger crop and expected demand from Asia. Oats are forecast up 250,000 tons to 500,000 for the same reasons.
  • Brazil corn rises 2.0 million tons to 34.0 million on projected record production and growing feed demand in developing countries. Even with record production, imports are expected at 1.0 million tons, the same level as a year earlier, particularly to southern states where swine and poultry production is concentrated but feed grain supplies are somewhat limited.
  • Canada corn is forecast down 500,000 tons to 1.5 million, reflecting strong competition from major exporters, while imports are down sharply by 1.2 million tons to 1.0 million on record production. Barley is forecast down 200,000 tons to 2.0 million on stronger competition from other exporters, namely Australia, the European Union, and Russia. Oats are projected up 200,000 tons to 1.8 million supported by greater demand and relatively higher prices in the United States. About 90 percent of oats exports are typically destined to the United States.
  • European Union corn is projected down 200,000 tons to 2.0 million. Barley is forecast up 1.0 million tons to 6.0 million reflecting near-record production and expectations for robust global demand in markets such as Saudi Arabia.
  • Russia corn is forecast up 1.5 million tons to 4.5 million with expected robust demand from the Middle East, North Africa, and East Asia. Barley is forecast up 500,000 tons to 5.3 million with a larger expected crop. In addition, exports are supported by robust demand in the Middle East and East Asia and logistical advantages to supply the region.
  • Ukraine corn is forecast down 2.5 million tons to 27.0 million on reduced exportable supplies. Ukraine is expected to be a key supplier to the European Union due to geographic proximity. Barley is projected up 300,000 tons to 4.5 million on larger crop prospects and higher demand in Saudi Arabia and other Middle Eastern markets.

OVERVIEW FOR 2018/19

Global corn production is up this month driven by larger crops primarily for Argentina, Brazil, Ethiopia, and Mali. Global trade is up with larger imports by Canada, the European Union, Mexico, and Peru more than offsetting a reduction for Vietnam. Exports are larger for Argentina and Brazil, reflecting abundant exportable supplies and competitive prices. The U.S. season-average farm price is down $0.05 cents to $3.50 per bushel.

CORN PRICES

Global: South American bids remained lower than last month, reflecting abundant exportable supplies. Argentine bids were down $1/ton to $158, while Brazilian bids were down $4/ton to $161 on favorable prospects for second-crop corn. Black Sea bids fell $4/ton to $170, pressured by ample global supplies despite steady demand from the European Union. U.S. bids fell $5/ton to $165 on abundant supplies from South America, although concerns over planting delays persist.