Global maize production forecasts down significantly (USDA)

Global maize production forecasts down significantly (USDA)

New York (awp/afp) – The United States Department of Agriculture (USDA) significantly lowered its forecast for world corn production for the current season on Thursday, surprising the market which saw prices rebound.

Global yellow grain harvests are now expected at 878 million tonnes, excluding China, 10% lower than the USDA’s previous estimate, released in December, according to the Wasde report released on Thursday.

Among the countries whose forecasts have been modified, Brazil and Argentina, which are paying for the effect of the La Nina climatic phenomenon which deprived part of these territories of sufficient rainfall.

“We know that the dry conditions probably played a role,” commented Damien Vercambre, from the Inter-Courtage firm.

Less expected, the contraction of more than 14% in US production projections, largely linked to lower harvested areas compared to planted areas.

American farmers thus left nearly 4 million hectares of corn standing this season, significantly more than in the two previous campaigns.

This development is partly attributable to the drought that has hit, and continues to hit, several American regions, particularly in the central part of the country.

“The revision in the United States is pulling the market a little,” reacted Gautier le Molgat, of the firm Agritel. After the publication, the benchmark US corn contract, for delivery in March, thus took up 2.66%.

Lower U.S. production prompted the USDA to project lower ending stocks, which surprised the market, said Michael Zuzolo of Global Commodity Analytics and Consulting.

For the analyst, corn has been wrongly shunned in recent weeks in favor of soybeans, while the first should have appreciated more than the second.

On the soybean side, the world production forecast has also been reduced, but to a lesser extent than corn.

In addition, this decrease was more than offset by higher beginning stocks than previously anticipated, especially in Brazil, where production was revised up by one million tonnes.

“With the (climate) problems faced by Argentina”, whose soybean production has been significantly reduced (-4 million tonnes), and the contraction in the United States, “Brazil is gaining”, underlines Gautier Le Molgat .