W23: Maize (Corn) Update

In W23 in the maize (corn) landscape, the USDA revised upwards its global corn ending stocks in the 2022/23 season from 297.4 million mt in the May forecast to 297.55 million mt, up compared to the market expectation of 297.1 million mt. For the 2023/24 season, the USDA projects global corn stocks at 313.98 million mt, an increase from the May estimate of 312.9 million mt, and higher than the market expectation of 312.8 million mt. The USDA also expects US corn closing stocks in the 2022/23 season to reach 36.88 million mt, up 2.5% compared to the May estimate of 35.99 million mt, and above the experts’ expectation of 36.73 million mt. For the 2023/24 season, the USDA estimates the US corn harvest at 387.73 million mt, unchanged from the May forecast but higher than the market expectation of 386.33 million mt. Also, the USDA adjusted upwards the US corn stocks for the 2023/24 season from 56.44 million mt to 57.33 million mt, up compared to the analysts’ forecast of 56.39 million mt. Furthermore, in W23, the USDA reports that US corn sales for the 2022/23 crop reached 172.7 thousand mt, while the market expected cancellations to amount to 100-600 thousand mt, with shipments mainly destined for Japan at 117.5 thousand mt. Also, 2023/24 US corn sales amounted to 106.8 thousand mt, below the average market projection of 100-400 thousand mt, with shipments mainly destined for Canada.

The USDA indicates that in the week ending June 1st, US corn export inspections reached 1.181 million mt, down 165.44 thousand mt WoW and 277.67 thousand mt YoY, with shipments mainly destined for China and Mexico. At the outset of Q4 of MY 2022/23, US corn inspections were 29.908 million mt, down compared to 43.767 million mt in 2021/22. The USDA also reports that as of June 5th, 64% of the US corn crop was in good to excellent condition, down 5% WoW, with 96% of the crop planted, up compared to the 5-year average of 91%. Also 85% of the US corn crop had emerged, up compared to 77% on average. The drop in US corn ratings is attributed to warm, dry weather in portions of the central and earthen Midwest. After the third driest May in over 30 years, abnormally dry and drought areas expanded across the US Corn Belt in May. However, at the onset of June, scattered showers and thunderstorms brought much-needed wet conditions for some fields, but missed many others. The drier-than-normal weather pattern needs to positively change in June to avoid significant headwinds for crops. The hot and dry end of May and beginning of June across the Corn Belt increased evapotranspiration rates. Rainfall was spotty across the Corn Belt, and almost non-existent in the eastern region. The high plains saw showers and storms day-after-day, which led to flooding in some areas.

StoneX projects Brazilian second-corn (safrina) production in the 2022/23 season at 102.9 million mt, an upward adjustment of 2.1 million mt compared to the previous indicator and surpassing MY 2021/22 production by 17 million mt. The increase is attributed to the favorable weather conditions for plant development in Brazil. Thus, the overall forecast for the 2022/23 Brazilian gross corn harvest stands at 133.8 million mt, up 1.2 million mt compared to the previous projection and above the 113.1 million mt registered in the 2021/22 harvest. IMEA expects 2022/23 corn production in Mato Grosso in Brazil to reach 48.99 million mt, up 4.2% compared to the May forecast of 47 million mt and an increase of 11.74% compared to 2021/22. The positive adjustment in the forecast came after an increase in the expectation of crop productivity to 110.05 bags per ha, up 4.20% compared to the previous estimate. This scenario is a reflection of the large volume of sown areas within the ideal window (until the end of February), totaling around 80% of the corn areas in the State of Mato Grosso. In addition, a greater volume of rain and a better distribution of precipitation were observed in 2023 compared to 2022 in most regions of the State of Mato Grosso, which helped in the vegetative and productive development of corn.

Russian export based corn prices remained stable and in-line with export parity calculations. Over the next month, demand for Russian corn is expected to remain moderately high, but competition with supply from the US and Brazil is growing. Lastly, in Q1-2023, Peruvian white corn exports totaled 1.2 thousand mt, valued at USD 2.4 million, up 3% in volume and 30% in value compared to the same period in 2022. The rise in price is attributed to an increase of 27% in the average international price of white corn, rising from USD 1.6/kg to USD 2/kg. Peruvian white corn shipments were mainly destined for Spain (USD 1.79 million), Belgium (USD 60 thousand), Japan (USD 222 thousand), and China (USD 220 thousand).