High prices slash U.S. corn export prospects

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According to the USDA's Feed Outlook report, reduced supplies and sharply increasing prices are expected to limit U.S. corn exports and constrain global corn trade. Projected U.S. 2012/2013 corn exports are slashed 8.0 million tons this month to 40.0 million as U.S. prices are expected to reduce import demand and encourage competitor exports.

World corn trade in 2012/13 is reduced 6.0 million tons to 97.5 million as alternative suppliers have limited exportable supplies. Brazil’s exports for the 2012/13 October-September trade year are increased 1.0 million tons to a record 12.5 million, as the 2011/12 second crop corn harvest is record large.

Argentina’s 2012/13 trade year exports are increased 0.5 million tons to 15.5 million, as exports are expected to be shipped rapidly (front loaded) after the March 2013 harvest. India’s exports are increased 0.3 million tons to 2.5 million as high global corn prices are expected to encourage exports at the expense of domestic use. However, Paraguay’s corn export prospects are trimmed slightly (down 0.1 million tons) as revisions to the 2011/12 supply and demand reveal increased domestic use.

Corn import prospects are down 2.0 million tons for China to 5.0 million, as high U.S. prices are expected to reduce the difference between international prices and corn prices in China, making imports less profitable. Forecast EU corn imports are also cut 2.0 million tons to 5.0 million as increased production prospects and soft meat demand are expected to limit the attractiveness of imports.

Corn imports for Japan and South Korea are each reduced 0.5 million tons this month, in line with similar reductions for 2011/12. Japan and Korea are diversifying away from corn in compound feed rations, and the expected swing back to corn in 2012/13 is now expected to be muted with reduced U.S. supplies. Mexico’s corn imports are trimmed 0.3 million tons to 9.0 million, as high corn prices are expected to limit meat production. However, for Israel, corn imports are up 0.3 million tons to 1.6 million, as tight barley supplies are expected to shift demand to corn.



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