Record world corn trade in 2012/13 projected up this month

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Global corn trade in 2012/13 (October-September) is forecast to reach a record 103.5 million tons, up 2.1 million this month. Competition between exporters is expected to keep corn prices attractive for most importers during 2012/13. Brazil’s large second-crop corn in 2011/12 will mostly be exported in the 2012/13 October-September trade year with exports projected up 1.0 million tons this month to 11.5 million. Prospects for a record 2012/13 corn crop in Russia support a continuation of aggressive corn exports as in 2011/12. Russia’s projected 2012/13 corn exports are up 1.0 million tons this month to 1.5 million. Record corn production in Belarus also is expected to boost export prospects, up 0.1 million tons to 0.3 million. The U.S. corn export projection for 2012/13 remains at 48.0 million tons (1.9 billion bushels for the September-August marketing year). As of May 31, 2012, outstanding sales for the 2012/13 marketing year reached 5.5 million tons, up 43 percent from a year earlier, supporting prospects for strong U.S. corn exports.

EU 2012/13 corn imports are projected up 1.0 million tons this month to 7.0 million. The EU is expected to import corn to use as animal feed and feed less wheat to livestock, maintaining relatively stable meat production. Indonesia’s corn imports are forecast up 0.5 million tons to 2.0 million. With corn prices declining, and corn use increasing year to year, Indonesia is expected to maintain stocks by keeping imports at the previous year’s level.

Forecast Lowered for U.S. Corn and Sorghum Exports for 2011/12
U.S. corn exports for 2011/12 (October-September) are reduced 1.0 million tons to 42.5 million based on the slower-than-expected pace of recent sales and shipments (down 50 million bushels to 1.65 billion for the September-August marketing year). U.S. Census corn exports for September 2011 through April 2012 reached 28.5 million tons, down 2.0 million from the previous year. May export inspections were 3.1 million tons, down 0.9 million from a year ago. As of May 31, 2012, outstanding export sales for the current crop year reached 7.7 million  tons, down 2.2 million from a year earlier. The size of additional sales that get shipped before the end of the marketing year depends on many factors, but two appear crucial at this point. The inverse between old-crop and new-crop futures prices gives importers an incentive to wait until the new crop is harvested before taking shipment. Conversely the amount of early corn harvest could boost exports during the current crop year. Simple correlations of these variables indicate they are useful for forecasting corn exports at this time in the crop year, and support this month’s reduction.

Russia’s 2011/12 corn export pace has been strong, and exports are projected up 0.5 million tons to 2.0 million. Argentina’s 2011/12 corn exports are also boosted 0.5 million tons to 14.5 million as prompt shipment of recently harvested corn increases the amount expected to be shipped before October 1, 2012. However, Brazil has not shipped as quickly as expected, so 2011/12 exports are forecast down 0.5 million tons to 10.0 million. EU corn exports are increased 0.2 million tons to 2.7 million based on ample export licenses. Import licenses are also larger than expected, boosting the EU corn import forecast 0.5 million tons to 5.5 million.

U.S. sorghum exports for 2011/12 are cut 0.25 million tons to 1.4 million (down 10 million bushels to 50 million for the marketing year). The pace of shipments in recent months has been extremely slow as old-crop supplies are limited by the small U.S. production. However, a recent increase in sales may indicate some shipment of new-crop sorghum before the start of the next marketing year, limiting the drop in forecast exports. Mexico’s sorghum imports are forecast 0.2 million tons lower due to tight U.S. supplies.

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