US corn exports will slow at their fastest rate since drought-blighted 2012, officials said, cutting their shipment forecast, in a briefing which also downgraded Ukraine’s harvest, while lifting expectations for European Union imports.
The US Department of Agriculture, in its much-watched monthly Wasde report on world agricultural commodity supply and demand, slashed its forecast for US exports in 2022-23 by 75m bushels (1.90m tonnes) to 2.08bn bushels.
The downgrade took to some 400m bushels (10m tonnes) the expected slump in exports from last season – a tumble which would be the biggest since 2012-13, when US corn export volumes were limited by drought damage to yields.
“Competition from other exporters and relatively high US prices have resulted in slow sales and shipments through early December,” the USDA said.
US corn export commitments, ie unfulfilled sales and completed shipments combined, are running 48% behind the year-ago pace so far in 2022-23, as started in September – largely thanks to low Mississippi river levels which have hampered delivery of supplies from Midwest producers to Gulf ports.
Although US corn export prices have fallen by $53 per tonne over the past month, helped by easing Mississippi barge rates, at $304 they remain above Brazilian prices of $286 per tonne and Ukrainian ones of $256 per tonne, the USDA said.
‘Record-setting autumn rainfall’
Indeed, the USDA lifted the forecast for Ukraine’s exports by 2.0m tonnes to 17.5m tonnes, noting the four-month extension to the Black Sea Grain Initiative, which guarantees safe passage from three of the country’s ports.
The upgrade came even as the USDA slashed its estimate for Ukraine’s corn harvest, by 4.50m tonnes to 27.0m tonnes, “with reductions to both area and yield as the ongoing conflict and record-setting autumn rainfall have delayed the harvest in key producing oblasts of Poltava, Sumy, and Cherkasy”.
The USDA upgraded too its forecast for Ukraine’s wheat exports, by 1.50m tonnes to 12.5m tonnes, citing the Black Sea grain deal, as well as “large shipments to the EU”, with Russia now seen shipping 43.0m tonnes, 1.0m tonnes above the previous estimate, on “price competitiveness”.
Russia, selling wheat at $316 per tonne, “remains the lowest priced among the major exporters”.
However, the revisions were offset by a 2.50m-tonne downgrade to an eight-year low of 7.50m tonnes in the wheat export forecast for Argentina, as the harvest was cut to 12.5m tonnes, “with reductions in both area harvested and yield on continued widespread dry conditions”.
The data nonetheless encouraged further selling in wheat futures, with the Chicago March soft red winter wheat lot standing down 1.7% at a one-month low of $7.33 ¾ a bushel in late-morning deals.
Paris soft milling wheat for March closed down 1.5% at E302.75 a tonne.
Chicago corn futures for March, meanwhile, stood up 0.2% at $6.44 a bushel, despite the export downgrade prompting a 75m-bushel upgrade to 1.26bn bushels in the forecast for US stocks at the close of 2022-23, a bigger figure than investors had expected.
Soybean futures for January shed 0.5% to $14.78 ¼ a bushel, despite the USDA holding its forecast for US carryout stocks at 220m bushels, rather than lifting the figure to 238m bushels as investors had expected.