The US supply and demand picture is very comfortable for the 23/24 season, which will end next August. The issue that is on the radar is the next local crop. At this point, the USDA’s Annual Forum brought the commodity analyst’s view confirming the market bias, that is, a reduction in planted area. At first, the signals may seem bullish and, indeed, contain greater pressure on prices, but we must understand that the issue of high initial productivity projected by USDA is a neutralizing factor. Another neutralizing factor is the record Argentine crop, which will ensure that international demand is met in the first half of the year. For Brazil, the decline in international prices makes port levels very low and should hinder Brazilian exports in 2024.
The USDA’s traditional forum brings discussion to all local agribusiness. Among the various topics are the analyst’s view of the corn supply and demand situation and his projections. The surprise in updating the projections for ten years was the relative stability in the corn demand for ethanol, basically aligned at 134 mln tons until 2033, even slightly lower than the current level. While corn production tends to surpass 400 mln tons, which could have already occurred in 2023. USDA looked conservative about the corn production environment and expansion in the corn demand for ethanol.
The USDA’s projection continues slowly moving toward exports of 62 mln tons, a level already seen in the recent past. In this export context, USDA projects Brazilian exports at 77 mln tons in 2033, definitively taking the lead in global exports.
For 2024, the USDA’s analyst projects a US area of 91 mln acres, well below the 94.6 mln acres planted in 2023. The cut in acreage will be an issue to be discussed by the market in the coming few weeks. However, the real number of planting intentions will only be released on March 31, in this case derived from an effective survey among growers. In May, USDA will release the first supply and demand picture for the 24/25 business year, which has been featured by starting with very high productivity projections. In recent years, USDA started estimating production at 182 bushels/acre. Depending on this adjustment between estimated area and productivity, the corn environment could be neutral for prices, as it will keep new crop stocks stable.
As we have mentioned in our editions, Argentina arrives with a potentially record crop from March, with more than 56 mln tons. The rain returned last week, leading crops to good development. The heat at the end of January should not be considered a problematic factor for local crops, not least because the crops came from good moisture conditions. Now, Argentina will need to export large volumes to free space for the soybean crop, which will also arrive recovered from April. FOB prices below USD 190/ton keep the country very competitive in international sales.