WORLD MARKETS AND TRADE :

COMMENTARY AND CURRENT DATA

Poor Corn Outlook for Southeast Europe Opens the Door for U.S. Corn Elsewhere: This year’s corn production is down for much of southeast Europe, affecting exports by Balkan countries and driving up EU-27 imports. Although good crops in Spain, normally the largest EU importer, and abundant supplies of feed-quality wheat may mitigate some EU-27 import needs, additional corn is likely to be sourced from Argentina and Brazil. This could, in turn, reduce exportable supplies available to their other markets.

The United States seems poised to benefit the most, either directly or indirectly, by backfilling those two countries. Outstanding U.S. export sales of nearly 15 million tons (old and new crop) and the unavailability of Southern Hemisphere new crop supplies for the next several months suggest that U.S. corn has a wide open window of opportunity.

Domestic: July export bids for U.S. #2 yellow corn averaged $147, down $20 per ton from last month. Improved weather in key growing regions and the USDA June acreage report showing better corn prospects by nearly 10 million tons drove prices down. However, trade has been volatile in reaction to mixed weather news, so late July Gulf bids moved upward (and have continued to do so into August) on strong corn export sales, tightness in global feed grain supplies, and poor crops across much of Europe.

• United States corn is raised by 3.5 million tons to 54.5 million, the sixth highest ever, because of shortfalls in global feed grain supplies.

• Brazil corn is up by 500,000 tons to a record 7.0 million tons in light of strong demand from Europe, which has a poor crop and prefers biotech-free corn.

• Russia corn is cut by two-thirds to 100,000 tons with diminished crop prospects.

• Serbia corn is slashed to just 200,000 tons (down 80 percent) as the crop is in very poor condition and exports are banned.

• Canada barley is down 300,000 tons to 1.4 million due to lowered production.

• Argentina sorghum is up by 100,000 tons to 800,000 in light of shipments and export registrations.

• United States sorghum raised by 900,000 tons to 5.0 million due to strong demand for GMO-free feed from the EU-27.

• EU-27 corn soars by 2.5 million tons to 6.0 million, a record for the EU-27 (and the highest in over 20 years).

• China barley is cut 200,000 tons to 1.8 million as high prices pressure brew masters to find substitute inputs for beer making.

• United States barley is dropped 150,000 tons to 300,000 tons due to rebounding production and tight supplies in Canada.

• EU-27 sorghum is increased by 750,000 tons to 1.0 million in light of import registrations and increased demand.

• Argentina corn is raised 300,000 tons to 14.3 million in light of continued strong shipments. New crop sales, however, remain unchanged because of current government actions to limit export registrations.

• Brazil corn is raised 750,000 tons to 6.5 million as sales and shipments to Europe accelerate.

• Serbia corn is cut by 200,000 tons to 1.0 million as a result of slow shipments in light of a poor new crop.

• Argentina sorghum raised 300,000 tons to 900,000 tons due to increased shipments and export registrations to EU-27.

• United States sorghum is raised 200,000 to 4.0 million in light of increased feed demand from EU-27.

• Egypt corn is up 300,000 tons to 4.6 million (and a similar change is made to 2007/08) as the poultry industry continues its recovery.

• Morocco corn is up 200,000 tons to a record 1.6 million based on the pace of shipments from Argentina and the United States.

• Venezuela corn soars by 400,000 tons to 500,000 based on recent sales and shipments from the United States.

• Saudi Arabia barley is cut 500,000 tons to 5.5 million because of a lower import pace and limited available supplies from exporters.

• EU-27 sorghum is up 300,000 tons to 900,000 tons based on the pace of shipments and sales from Argentina and United States.

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Last modified: Friday, August 10, 2007