W46 Corn Update: Global Forecast Up by 4mmt, Challenges in US and Brazil Production, and Export Dynamics

Global Corn Forecast Revised Upward, but Decline Expected in Brazil's Production for the 2023/24 Season

In W46 in the maize (corn) landscape, the International Grains Council (IGC) increased its forecast for global corn production in the 2023/24 season by 4 million metric tons (mmt) to 1.22 billion metric tons (mt), citing improved prospects for the United States (US). The intergovernmental body's monthly update raised its projection for the US corn crop to 387 mmt, up from the previous forecast of 382.7 mmt, due to better-than-expected yields.

Meanwhile, Brazil is expected to see a decline in corn production for the 2023/24 marketing year (MY) due to high production costs and the impact of El Niño on weather conditions. The United States Department of Agriculture (USDA) forecasts a decrease from 135 mmt in 2022/23 to 130 mmt. The oversupply of corn in the market resulted in lower incomes for farmers, leading to reduced plantings for the next season. In turn, this contributed to a 2% decrease in corn exports to 54 mmt in 2023/24. Despite high demand, particularly from China, prices may experience a slight increase due to currency appreciation.

In contrast, France has raised its official estimate for 2023's corn harvest for the third consecutive month. Beneficial summer rains have supported the recovery of rainfed farms from last year's drought, leading to an estimated production of 12.20 mmt, 13.3% above the 2022 volume. The Ministry of Agriculture noted that the yield difference between rainfed and irrigated farms is expected to be smaller than last year and the five-year average.

Brazilian Harvest Progresses Unevenly, While US Corn Harvest Exceeds Five-Year Average

According to the National Supply Company (Conab), the 2023/24 summer planting in Brazil reached 45.8% of the total forecast, slightly behind the 53.9% recorded during the same period in the previous harvest. Notable advancements were observed in states like Paraná (95%), Santa Catarina (89%), and Rio Grande do Sul (80%), while some states, including Bahia (9%) and Goiás (1%), show slower progress, indicating planting delays compared to the previous year. The crops already sown are in various development stages, with 11.5% in the emergency phase, 77.3% in vegetative development, 9.6% in flowering, and 1.6% in grain filling.

According to the USDA's weekly weather and crop bulletin, the US corn harvests reached 81%, exceeding the five-year average of 77% by November 5. Additionally, dry weather in the Plains and upper Midwest is facilitating autumn fieldwork, including the harvest of corn and soybeans, both of which are above the five-year average.

Corn Exports Surge in the US, with Notable Increases to Mexico and Japan

In the week ending November 9, the US exported 1.81 mmt of corn from the 2023/24 harvest, according to the USDA. This volume represents a 78% increase week-on-week (WoW) and an 81% increase month-on-month (MoM). The main buyers included Mexico (1.061 mmt), Japan (532.9 thousand mt), Colombia (124 thousand mt), South Korea (59 thousand mt), and Honduras (50.9 thousand mt). However, these gains were partially offset by cancellations from Morocco (35 thousand mt), Canada (13 thousand mt), El Salvador (7.2 thousand mt), and the Dominican Republic (4 thousand mt).

Indonesia is set to receive 151 thousand mt of imported corn out of a total import quota of 250 thousand mt, as decided by the government in Oct-23. On November 15, 20 thousand mt of the allocated quota arrived at Teluk Lamong Port in Surabaya. This is aimed at replenishing government corn reserves (CJP) and addressing concerns from chicken farmers and independent laying hen breeders about the high corn prices.