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August 05, 2020 | FBN Insights | Kevin McNew

World Corn Trade Below Last Year

Largest reductions this year are due to smaller Brazilian shipments due to increased domestic usage and decreased imports from coronavirus slowdown

World Corn Trade Below Last Year 

  • World corn exports in July were 14.4 million tonnes, up from 12.6 million last month, but below the 15.8 million seen last year.
  • US exports for the month rose to 4.3 million tonnes from 2.9 million last year.
  • In South America, Brazil exports decreased to 5.1 million tonnes from 6.7 million, while Argentina exports were nearly steady at 4.3 million. 
  • Exports from Argentina, Brazil, Russia, Ukraine and the US were 124 million tonnes, below last year’s 128 million. 
  • USDA has forecasted 2019/20 world exports at 176 mmt compared to 172 million the previous year. 
  • The agency has projected world exports to be higher again next year at 183 million tonnes in 2020/21.

FBN’s Take On What It Means: The largest reductions this year are due to smaller Brazilian shipments due to increased domestic usage and decreased imports for Iran and the EU amid the coronavirus slowdown. USDA’s 2020/21 export forecast will likely be a high bar to clear and will require shipments to accelerate significantly in the new marketing year. 

EU Wheat Production Continues to Decline  

  • Romania’s Agriculture Ministry Forecast the wheat crop to fall over 40% to 5.5- 5.6 million tonnes from 9.1 million last year. 
  • Strategie Grain recently projected Romania’s crop will be 7.1 million tonnes while the IGC projected 7.8 million.
  • Romania exported 5.6-6.1 million tonnes of wheat in each of the last three years with crops in the 8.0-9.4 million tonne range.
  • Germany’s state statistics office estimated their wheat crop at 20.2 million tonnes compared to most forecasts near 22 mmt. 
  • Combined with recent downgrades in the France soft wheat harvest and the total EU27+UK wheat crop could be below 135 million tonnes. 
  • The latest USDA forecast in July was for a total EU crop of 139.5 million tonnes.

FBN’s Take On What It Means: The German agency cited lower area compared with previous estimates, while the Romanian ministry’s downgrade comes following extreme drought conditions during much of the growing season. With the sharply reduced crop this year, exports will be expected to decline significantly, as well. However, at this time it appears Russian exports will be able to pick up much of the slack, leaving less opportunity for the US. 


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