Coarse Grains. World Markets and Trade. April 2020 – USDA April 9, 2020
OVERVIEW FOR 2019/20
Global corn production is forecast up with larger crops in the European Union and Belarus more than offsetting reductions for Indonesia and Laos. Global trade is up marginally from last month with higher imports for Indonesia, South Korea, and Turkey. Exports for Argentina and the European Union are higher, more than offsetting a reduction for Russia. The U.S. season-average farm price is down $0.20 to $3.60 per bushel.
Global: Since the March WASDE, U.S. bids are down noticeably by $17/ton to $160 as gasoline and ethanol demand have plummeted under COVID-19 containment measures, though prices inched up until the March 31 NASS release of Prospective Plantings and Grain Stocks. Despite riding along with U.S. bids over the last several weeks, Argentine bids are down $3/ton to $169 and Black Sea bids are up $2/ton to $180, both ending the period little changed. Brazilian bids remain seasonally unavailable.
U.S. Corn Exports to South Korea Plummet in First Half of 2019/20
South Korea is a top five destination for U.S. corn exports. However, accumulated exports through Week 30 of MY 2019/20 (Sep – Aug) are the second lowest in the last 20 years, even lower than the drought-affected 2012/13 year. The one-two punch of a difficult U.S. planting and harvesting year coupled with greater South American corn availability at lower prices has become a familiar story by now, but the effects are particularly noticeable here. South Korean data tells a similar story: of the 5.2 million tons of corn imported between October 2019 and February 2020, less than 1 percent was of U.S. origin.
Exportable corn supplies from South America are seasonally tight, opening a small window for U.S. corn sales. The U.S. share of South Korea’s corn imports could improve in the second half of the marketing year as price-sensitive buyers in South Korea would turn to competitively priced feed grains. Currently, U.S. corn is very price competitive (see Selected Export Bids on the prior page) as COVID-19 containment measures in the United States have curtailed gasoline and ethanol demand. Additional corn demand is also expected from reduced feed-quality wheat imports as wheat prices have risen over the past month.
South Africa Corn Exports to Rebound in 2019/20
South Africa corn exports are forecast at more than double last year’s level supported by abundant supplies and strong demand in neighboring countries. The depreciation of the rand, which has lost about 30 percent in value against the U.S. dollar since January, could further stimulate sales to both nearby and other countries in the global market.
Continued favorable conditions throughout the growing season have sharply boosted prospects for the crop. The production forecast at 16.0 million tons will be the second largest on record, if realized. The price movement also reflects anticipation of abundant supplies in the domestic market. Yellow corn prices have dropped 18 percent ($34/ton) since January to $160/ton, the lowest since July 2018, while the decline for white corn has been modest due to relatively tight nearby stocks. Typically, a little over half of the crop grown in the country is white corn, predominately used for food.
South Africa has been the perennial supplier of white corn to neighboring countries. Prospects for exports appear bright as corn crops in neighboring countries, mainly Angola, Botswana, Eswatini, Zambia, and Zimbabwe, suffer from persistent drought. Yellow corn, used mostly for feed, has reached markets in Asia and Latin America in those occasional years when exportable supplies were abundant.