This week’s correction in corn futures could be short-lived, as Gro data shows strong exports are likely to push US corn ending stocks below levels currently forecast by the USDA.
The February USDA WASDE report raised its estimate of US corn export demand by 2% to 2.60 billion bushels (66.0 million tonnes). While that would represent record exports, Gro expects total shipments, particularly to China, will be even higher.
US exporters have already sold 87% of the USDA’s estimate, and there are still seven months remaining in the marketing year. In just the last week, the USDA announced corn export sales of 293 million bushels (7.4 million tonnes), mostly to China.
China’s abnormally high domestic corn prices indicate that demand for feed grains remains high, while domestic supplies are tight. The US is the cheapest source for corn, on an FOB basis. Brazil’s supplies are tight, and planting delays for the country’s second corn crop, or safrinha, will mean a late harvest. That, in turn, could keep US corn exports elevated into July.
WASDE boosted its estimate of China corn imports by 37% to 24 million tonnes. The report left unchanged its corn crop estimates for Brazil at 109 million tonnes and for Argentina at 47.50 million tonnes. Forecasts by Gro’s Brazil and Argentina Corn Yield Models indicate production in both countries will be lower than USDA estimates.
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