Fundamentally Speaking

In the WASDE report released earlier this month they did hike global corn production by 6.40 million metric tons (mmt) with larger crops in the U.S. and Argentina.

That helped boost 2021/22 world ending stocks up 2.70 mmt from the October estimate and 12.55 mmt from the prior season which after three straight years of declining global inventories is a welcome development.

Still 34.42 mmt, other than last year, is the smallest world corn stocks figure in seven seasons.

This graphic shows the world, world less China and large exporter corn ending stocks in 1000 tonnes on the left-hand axis vs. the world, world less China and large exporter corn stocks-to-use ratio on the right-hand axis.

The large exporting nations are Argentina, Brazil, Russia, South Africa, Ukraine, and the U.S.

The world corn stocks-to-use ratio at 26.0% is just barely above the year ago 25.5% level and the second lowest since the 2013/14 season.

With China processing close to 211 million tonnes of corn, more than two thirds of the world's total, we decided to take them out of the equation as the world less China stocks is 93.7 million, and though up from last year's 86.2 million tonnes, is also the second lowest since the 2013/14 season though the world stocks-to-use ratio less China at 10.7% vs. 10.0% last year and other than that and the two sub 10% levels seen in 2011/12 and 2012/13 is the lowest since 2000.

Finally, while the stocks of the planet's six major corn exporting nations at 541 million tonnes is quite a bit higher than the year ago, 42.7 million metric tons is the lowest since the 2013/14 marketing year, while the large exporter stocks-to-use ratio at 12.5% is the lowest since the 2012/13 season.

The bottom line is that competitor supplies are still very tight and that may aid the U.S. in attaining current 2.50 billion export projection though much will depend on Chinese import demand which USDA has at 26 million tonnes, down from 29.5 million last year, though the aUSDA attache in Beijing is quite a bit lower at 21 million tonnes.

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