WASDE: Corn’s US changes minimal, Argentina production slashed

Aside from modest tweaks domestically to reflect the recent surge in US corn exports, the bulk of the changes in the February WASDE report were internationally focused, with the much-anticipated revision of Argentina’s corn crop seeing 3 million mt slashed from production.

Front month CBOT futures gained 2 cents/bu in the immediate aftermath of the report’s release, as US ending stocks were revised downwards by 125 million bushels to 2.352 billion, below most analyst’s pre-release expectations which had captured a range between 2.4 billion and 2.54 billion bushels.

The ending stock reduction came from higher export figures, which jumped to 2.05 billion from 1.925 billion, on the back of recent strong export showings for US corn.

Globally, as South American supply has dried up, the US has emerged as the most competitive origin, with private export sales since January 26 topping 1.2 million mt, and 1.77 million mt export sales recorded in the week ending February 1, USDA data revealed Thursday.

There was no revision of feed demand or ethanol consumption, which remained at 5.550 billion bushels and 5.525 billion bushels respectively.

Rest of the world

Ending stocks around the world were slashed by 3 million mt to 203.09 million mt, with the US, Argentina, Southeast Asia and Ukraine all seeing their ending stocks revised downwards.

Beginning stocks were adjusted up by 1 million mt to 229.76 millio mt.

Argentina’s revision was the most eye-catching, production dropping to 39 million mt from 42 million mt, at the very lowest end of analysts’ expectations, where guesses averaged 40.5 million mt.

There was no change for Brazil’s production level, as signals suggest fears of the safrinha crop being switched to cotton instead of corn appear to be fading, and no change for South Africa’s corn production, despite the country being in the grip of a significant drought.

Brazil’s production holds at 95 million mt, with South Africa at 12.5 million mt.

The EU and Brazil are also expected to take slightly more corn in imports, while feed demand was modestly adjusted upwards to reflect corn’s competitive pricing versus other animal feeds.

Finally, Argentina’s export prowess was trimmed by 1.5 million mt to 27.50 million with much of that increase then redressed by a one million mt increase to Brazil’s export firepower – revised upwards to 35 million mt.