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Global feed market: Global corn supply has declined, and feed prices have risen

 Last Update: 2022-10-19
 Source: Internet
 Author: User

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Foreign media news on October 16: In the week ending October 14, 2022, global feed prices rose, mainly due to the US Department of Agriculture supply and demand report lowered US and even global corn production and ending stocks, and the continuity of Black Sea cereal exports faced uncertainty; At the same time, international crude oil futures retreated significantly, the dollar strengthened, macro concerns intensified, and export sales were sluggish
, which constrained the rise in corn prices.

The Chicago Board of Trade (CBOT) December 2022 corn futures closed at around $6.
8975/bushel on Friday, up 1%
from a week ago.
The spot price for US Gulf 2 yellow corn for October shipping schedule was $8.
8725 per bushel, up 0.
5% from a week ago; NOVEMBER 2022 CORN FUTURES ON THE EURONEXT EXCHANGE CLOSED AT AROUND 340.
25/MT, 1.
1%
FROM A WEEK AGO.
Argentine corn FOB quotes in Upper River were $313/mt, up 1.
3 percent
from a week ago.

International crude oil futures fell sharply this week, ending a two-week winning streak as fears of a global recession and weak fuel demand outweighed support from
the OPEC alliance's slashing output.
The New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) November contract closed at $85.
61 a barrel, down 7.
6 percent
from a week ago.
The global benchmark December Brent crude futures were at $91.
63 a barrel, down 6.
4 percent
from a week ago.

The dollar index was at 113.
202 on Friday, up 0.
5 percent
from a week ago.

The USDA supply and demand report lowered production and inventories

Data from the USDA's October supply and demand report was largely in line with expectations, with the agency lowering U.
S.
corn yields to 10.
79 mt/ha (171.
9 bushels/acres) in 2022, for a total yield of 352.
95 million tonnes (13.
895 billion bushels).

Both of these figures are in line with the market consensus, and there are no surprises (scares).

U.
S.
corn supply in 2022/23 was 1.
1 percent lower than expected in September and 6.
2 percent
lower than in 2021/22 due to lower production revisions and a lower September 1 corn stockpile in the September quarterly inventory report.

In terms of demand, the USDA increased feed and other usage by 1.
27 million tons (50 million bushels).

According to recent ethanol plant starts and the 2023 Energy Outlook report released by the U.
S.
Energy Information Administration (EIA), the USDA lowered the amount of U.
S.
corn used for ethanol production by 1.
27 million tons (50 million bushels); The 2022/23 export forecast was revised down by 3.
18 million mt (125 million bushels) to 54.
61 million mt (2.
150 billion bushels).

After these adjustments, U.
S.
corn ending stocks were revised down by 1.
19 million mt (47 million bushels) to 29.
77 million mt (
1.
172 billion bushels), a year-on-year decrease of 3.
8%.
Inventories were lowered more than market expectations, giving the report a bullish tone
.
The corn stock-to-use ratio fell to 8.
3%, tied with 2020/21 as the lowest since
2013/14.
As a result, the USDA raised the annual average farm price by $1.
97/mt ($0.
08/bushel) to $267.
70/mt ($6.
80/bushel).

Global maize production and ending stocks were also revised down

In terms of global supply and demand, the USDA this month lowered European corn yields by 0.
2 mt/ha to 6.
32 mt/ha, and corn production also lowered by 2.
6 million mt to 56.
2 million mt, down 20.
8% year-on-year and the lowest in 15 years
, mainly due to the reduction in France.

Ukraine's corn supply figures were largely unchanged, but exports increased by 2.
5 million mt to 15.
5 million mt.

Global corn production this month was revised down by 3.
8 million mt from the previous month to 1,168.
74 million mt, down 4% year-on-year; Period-end inventories were lowered by 3.
3 million mt to 301.
19 million mt, down 1.
9%
y-o-y.

Nearly a third of the U.
S.
corn harvest is harvested

USDA's weekly crop progress report shows that the corn harvest continues to advance, with only minor delays
in a few states.
As of Oct.
9, 87 percent of the corn was ripe and 31 percent had been harvested
.
Cold rainfall in the Midwest has caused slight delays recently, but the outlook for the next two weeks remains good
.

The Mississippi River, the aorta of grain transportation in the United States, is still affected by low water levels, hampering barge shipments
of grain.
But barge congestion improved earlier this week when the U.
S.
Coast Guard announced that two jams had been cleared, improving logistics and barge freight rates began to fall
.
Now that the US Gulf corn offer has increased, the autumn export plan is expected to start
quickly.

China's corn import data was revised down last year

This month, the USDA lowered its 2021/22 corn import data to 22 million mt from 23 million mt forecast last month, a 25.
5% drop from the 2020/21 Trump peak of 29.
51 million mt (thanks to Trump for pushing China to buy large amounts of US corn at lower prices) and still the second-highest on record
.
China's corn imports for 2022/23 are expected to remain unchanged at 18 million mt, which would be the third highest point
in China's history.

In terms of import sources, China imported 20.
86 million mt of corn from the US in 2020/21, accounting for 70.
7%, which is also the highest proportion
since 2011/12.
During the weekend, China reiterated that it wants to keep Chinese rice bowl firmly in its own hands, and future corn imports from the United States, both in total volume and proportion, are likely to continue to decline
.

The USDA's weekly export sales report showed that net U.
S.
corn exports totaled 260,000 mt in the week ended Oct.
6, below market expectations
.
Of these, 200,000 tonnes in 2022/23 and 60,000 tonnes in 2023
/24.
Year-to-date, U.
S.
corn export sales (both exported and unexported) were 13.
423 million mt, down 51.
4%
year-on-year.
So far this year, U.
S.
corn sales to China totaled 3.
39 million mt, down 71.
5%
year-on-year.

In recent years, China has used Ukraine as one of
its main corn suppliers.
But the Russian-Ukrainian conflict has disrupted
Black Sea exports.
Although Ukraine has resumed exports from Black Sea ports since August, the main destination for grain exports is EU countries
.
Ukraine's corn exports so far in 2022/23 have increased 2.
6 times year-on-year, with exports to the EU accounting for half
of its total exports.
Ukraine's corn exports in 2022/23 were 5.
586 million mt as of Oct.
12, up from 1.
537 million mt
in the same period a year earlier, according to Ukraine's Ministry of Agriculture.
EU imports of 2.
87 million mt of corn from Ukraine in 2022/23 as of Oct.
9, accounting for 36.
4% of the EU's total imports, EU data showed; For comparison, the EU imported 800,000 tonnes of corn from Ukraine in 2021/22 (20.
4%)
.

China could start importing Brazilian corn by the end of the year

Reports emerged this week that China could start importing Brazilian corn as early as December to reduce its dependence on U.
S.
supplies and replace Ukrainian supplies
.
About 45 companies, including Bunge, Cargill and ADM, have received pre-approval from Brazil to export corn
to China.
Although Brazil is the world's second-largest corn exporter, China has hardly imported corn
from Brazil in bulk over the past nine years due to phytosanitary concerns.

Brazil's total corn production will reach 127.
24 million mt, up 12.
3 percent from the previous year
, according to the first Brazilian corn production forecast released this week by AgResource Brasil.
The total maize sown area in Brazil in 2022/23 was 22.
37 million hectares, with an average yield of 5,687 kg/ha
.
The company estimates that La Niña will have a limited impact on first-crop corn production in south-central Brazil, especially in years when La Niña intensity is
low.

As of Oct.
6, the first corn planting progress in Brazil's south-central region in 2022/23 was 38.
8 percent, compared with 34.
1 percent the week before and 37.
9 percent
in the same period last year, consultancy AgRural said on Monday.

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