Sep 20, 2014
Home | Tools| Events| Blogs| Discussions Sign UpLogin

Can Corn Catch Fire?

July 31, 2013
By: Ed Clark, Top Producer Business and Issues Editor
corn kernels dark
  
 
 

Sober near-term trade outlook for corn exports

eclark@farmjournal.com

Forget this year for corn exports. It’s an outlier year with only 700 million bushels of anticipated demand. Exports had to crash; U.S. corn literally was not there to sell.

The 2013 crop is a different matter. Production is set to rebound, but without an export surge, carryover skyrockets. The corn price outlook is sobering.

Don’t look for a quick resurgence to previous levels, experts say. USDA forecasts exports at 1.25 billion bushels for the 2013-14 marketing year.

Global demand is growing, but record prices stimulated not only U.S. producers to shift more acres to corn, but competitors, too.

"The global impact of short U.S. production and high prices has been similar to the 1980 grain embargo against the then Soviet Union," says Dan O’Brien, Kansas State University ag economist. "From 2002-12 global corn acreage increased at a much faster rate than U.S. acreage. Even so, U.S. production only slightly lagged world output because of higher U.S. yields than those globally."

From 2008-12, corn production increased 51% in Brazil, 24% in China and 84% in Ukraine. Brazil’s corn exports are up 276%, from 2008-12. That makes Brazil the No. 1 corn exporter in 2013, and China the world’s No. 2 corn producer.

While U.S. exports are down, the U.S. is forecast to regain its crown as the No. 1 corn exporter for 2013-14, even though exports next year will be down 31% from 2008-09.

Part of that is because ethanol production ramped up in 2007, but a big part of the shift is that there are new kids on the export block.

With a reduction in the ethanol blend wall and reduced livestock numbers, the timing couldn’t be worse, O’Brien says.

leading corn exporters

Export Bull. Chad Hart, Iowa State University ag economist, is bullish on U.S. exports, but admits getting customers back could take years. "I predict 1.6 billion in exports for the 2014 crop," he says. For 2015 through 2018, he looks for a range of 1.8 billion to 2.3 billion bushels.

Demand for the next two years likely means negative margins on average, he says, but balance sheets will be back in the black by 2015-16.

In the meantime, stocks will increase. USDA’s July 11 World Agricultural Supply and Demand Estimates projects world corn stocks for 2013-14 to be 151 million metric tons, an increase of 20.5 million tons from 2012-13, which is the most in 12 years.

READ MORE
Previous 1 2 Next

See Comments

FEATURED IN: Top Producer - Summer 2013

 

MARKETS

CROPSLIVESTOCKFINANCEENERGYMETALS
Market Data provided by Barchart.com
Enter Zip Code below to view live local results:
bayer
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions