Corn: Even as China reduced their demand outlook, US corn prices lifted to seven-month highs. In its monthly crop report, China’s Ministry of Agriculture forecast imports for the 2016/2017 crop year that ends in September as low as 800,000MT, down 200,000 from last month’s estimate. That would be down from 3.2 million MT for the calendar year 2016 and a third of the average for the past decade, according to Reuters. The USDA expects China imports at 3 million MT and National Grain and Oils Information Center estimates 2 million MT.
However, the market honed in on the latest farm policy out of China that will shift focus away from output and toward demand. The document calls for stabilizing hog production, stimulating demand for dairy products and finding new channels to digest corn stock and the idea of China experiencing a contraction in domestic stockpiles leans favorable for the global marketplace.
Argentina’s corn crop will total 36.5 million MT, the Rosario Grain Exchange said in its February monthly report, up from its previous estimate of 35.5 million MT. And in Brazil, CONAB expects corn production in the 2016/17 season is likely to reach a record 87.4 million MT, versus the previous estimate of 84.5 million MT. Though Brazilian farmers are reportedly struggling with wet weather that has slowed down the planting of the safrinha corn crop.
The February USDA Supply and Demand report placed corn ending stocks at 2.32 billion bushels versus trade expectations of 2.335 billion bushels. World corn ending stocks were lowered more than expected to 217.6 million MT against the average trade estimate of 220.5 million MT. Corn used to for ethanol was raised 25 million bushels to 5,350 million based on the most recent data from the Grain Crushings and Co-Products Production report alongside and strong pace of weekly ethanol production during January.