OVERVIEW FOR 2019/20

Global corn production is forecast up with larger crops for Ukraine and the United States. Global trade is up slightly from last month driven by larger imports for Zimbabwe. On the exporter side, higher exports for Ukraine offset a reduction for Brazil. The U.S. seasonaverage farm price is down $0.10 to $3.70 per bushel.

OVERVIEW FOR 2018/19

Global corn production is up this month driven primarily by a record crop for Argentina. Global trade is up as larger exports for Argentina and Brazil more than offset a sharp cut for the United States. The U.S. season-average farm price is unchanged at $3.60 per bushel.

CORN PRICES

Since the June WASDE, U.S. bids have fluctuated but ended up $9/ton to $200 as U.S. production uncertainty keeps prices elevated. The NASS Acreage report estimated U.S. planted area above market expectations. However, with more than 15 percent of the crop remaining to be planted at the time of the survey, uncertainty persists over what has actually been planted. NASS will resurvey essentially all the major corn producing states during July, and should those results merit any changes, they will be published in the August Crop Production report. South American bids have closely followed U.S. price movements. Argentine bids were up $11/ton to $185 and Brazilian bids were up $12/ton to $186. Black Sea bids rose $16/ton to $195.

U.S. Oats Imports Nearly a Mirror Image of Canadian Exports

Global oats trade is expected to expand by 20 percent in 2019/20, driven almost entirely by an increase in Canadian exports to the United States. Despite the European Union and Russia both growing more oats, only a small percentage of this production is currently exported. Canada-U.S. trade makes up about two-thirds of the world’s oats trade. Though EU oats once made up an appreciable amount of U.S. imports, Canada now supplies, on average, 95 percent of total oats imports for the United States. As a result of uncertainty in rapeseed trade with China, some growers have shifted away from rapeseed to grow more barley and oats. The close oats trade relationship between Canada and the United States means the jump in Canadian oats production and corresponding expansion in exports will logically flow south.

In the United States, feed demand is the most responsive to an increased availability of oats. Oats are commonly used as feed for racehorses but can also be fed to calves. Some of this increased oat feeding could be a regional response to locally tightening corn supplies. In contrast, food, seed, and industrial use has remained relatively flat over the past decade, despite nutritional labeling of oats as a “heart-healthy” food from its beta-glucan content. For industrial uses, oats are incorporated into skin care and cosmetic products for the emollient properties. Though traditional preparations of oats for products such as oatmeal and granola almost certainly dominate food uses, the growing popularity of the non-dairy alternative “oat milk” may be an interesting, albeit very small, component of demand.