The USDA increased its forecast for 2022/23 Ukraine corn exports by 13% from last month’s estimate, following renewal of the Black Sea Grain Initiative. However, that would still leave corn exports for the war-torn country, which is normally the world’s No. 4 supplier of corn, at 34% below last year’s levels.
In its December WASDE report, the USDA also reduced its forecast for US corn exports, which are running 32% behind the historical average so far this marketing year, as seen in this Gro display, due to cheaper supplies from South American sources. The agency now expects US corn exports of 52.71 million tonnes for 2022/23, down 3.5% from its November forecast.
Low Mississippi River water levels, a crucial conduit for US exports, also crimped grain shipments early in the fourth quarter, as Gro wrote about here.
Despite estimating higher Ukraine corn exports, the USDA cut its corn production forecast for the country by 14% to 27 million tonnes, which represents a 36% year-over-year decline. The impact of its war with Russia eroded planted area and yield, and record wet conditions in the country’s Poltava, Sumy, and Cherkasy regions delayed harvest, as shown in this Gro display.
The Black Sea Grain Initiative, which establishes a safe thoroughfare for Ukraine to export agricultural products, was extended last month for an additional 120 days, as Gro wrote about here.
The USDA also reduced its forecast for global wheat ending stocks, excluding China, by 490,000 tonnes to 122.97 million tonnes, as forecasted higher production in Australia is outweighed by declines in drought-hit Argentina, as Gro wrote about here. Estimates for the South American country’s wheat exports were cut by 25% from last month, which represents a 54% year-over-year decline. This display in Gro’s Climate Risk Navigator for Agriculture, weighted for Argentina’s wheat growing areas, shows vegetative health is at the lowest level in more than 20 years.
The USDA also cut its estimate for US soybean oil demand for biofuels by 1.7% from last month’s forecast following the Environmental Protection Agency’s modest increases to renewable fuel standard blending proposals through 2025. However, Gro sees upside to the USDA’s soyoil demand for biofuels as greater amounts of renewable diesel capacity is slated to come online in 2023, as Gro wrote about here.