USDA Argentina Attaché Report Raises 2021/22 Corn Forecast
The USDA post in Buenos Aires released an attaché report Tuesday raising their 2021/22 corn production forecast to a record 54.5 million tonnes.
This is 1.5 million tonnes higher than official USDA October estimate and would be 4.1 million tonnes higher than 2020/21 production (the report raises 2020/21 production 400,000 tonnes higher than official USDA figure).
The higher production is mainly from higher acreage figures but includes a slightly lower yield versus the previous outlook.
The post also sees exports at a record 40 million tonnes, two million higher than what the USDA forecast in October, on a combination of higher production and lower domestic consumption.
FBN’s Take On What It Means: The higher acreage figure is seen coming partly from corn being the most profitable crop for most growing regions in Argentina. Production costs are much higher than for soybeans, but farmers were able to purchase some inputs in advance and are coming off a profitable 2020/21 season. With a dry environment from La Nina, many producers will plant corn late. About 26% of the crop is currently in the ground.
China’s January 2022 Corn Futures Hit One Million Volume
China’s most active corn future, January 2022, hit a volume of one million contracts on Monday.
The volume was the largest since February and the third highest of the year.
Prices are still pretty far off year’s highs seen in May, but they have rebounded strongly from the lows hit last month.
Investors have increasing concerns over logistics, weather, and domestic production.
USDA sees China’s production at 273 MMT, which is up from last year’s harvest at 261 MMT.
China’s ag ministry cut production 850,000 tonnes, expecting total production at about 271 million tonnes, about two million less than forecasted by the USDA.
But late-season rains have raised quality and harvest concerns.
Feed demand for China remains robust.
FBN’s Take On What It Means: Recent heavy rains have delayed harvest in the northeast of China, raising concerns about crop production and quality. China sees itself importing 20 million tonnes, while the USDA sees the figure at 26 million, down 7% year-over-year. The US would be a main beneficiary of China needing more supplies.
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