We did some work this week with the global corn situation and note that the coming year's global corn stocks-to-use ratio is pegged at 24.3% which is even lower than this year's 24.5% and would be the tightest ratio since 22.5% in the 2013/14 season.
Breaking it down further, the world stocks-to-use ratio less China, which in itself accounts for 71% of global corn stocks, is a much lower 9.9% for the coming year, barely above this year's 9.6% and not that far from the 9.5% level seen in 2012/13 when U.S. corn prices moved to all-time highs, though not as low as seen in the 1995/96 season of 7.7%.
Finally, we look at the stocks-to-use ratio of the major corn exporters which besides the U.S. includes Argentina, Brazil, Russia, South Africa, and Ukraine which for the 2021/22 season is pegged at 11.1%, above this year's 9.4% which is around the low levels seen in 2011/12 and 2012/12.
A couple of caveats is USDA looking for Argentina, Brazil, Russia, and Ukraine combined to produce 45 million metric tons of corn more for this coming year than for the current season and about two-thirds of that extra output to be exported.
That assumes that production in each country meets expectations which is far from assured as all four are already dealing with longstanding dryness issues.
Also, we continue to point out while USDA has Chinese corn stocks pegged at 198 million tonnes for the second year running, many other analytical services feel a more realistic figure is closer to 130 million tonnes.
Regardless, the fact is that both in the U.S. and worldwide, corn supplies once again will be very tight, suggesting that prices should hold in the $5-6.00 range much of the time for the coming marketing year.
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