WASDE: South America sees nearly 6 mil mt cut off corn production

The USDA’s April revision of its WASDE report came in at or just below most market expectations on many of the key headline markers, with South America collectively seeing nearly 6 million mt shaved from overall 2017/18 production estimates.

Starting with global figures, world ending stocks were cut to 197.8 million mt, slightly above average estimates which had expected a 197.3 million mt carryover, but a cut of 1.4 million mt on March’s figure – which itself was the result of a downward revision.

World corn production was also trimmed with the changes to South American production key in delivering a global estimate of 1.036 billion mt – down 5.7 million mt and a reflection of the ongoing lingering impact of dry weather in Argentina.

Mexico and South Africa saw their corn production estimates brought into line with government estimates to take production to 26.8 million and 12.2 million mt, respectively.

Further trims were made to production in Paraguay, Southeast Asia and the Former Soviet Union, but the big cut – much anticipated – came to Argentina, which saw a 3 million mt production reduction taking its crop estimate to 33 million mt.

That was 700,000 mt below many analysts’ expectations, as was the 2.5 million cut to Brazil’s corn crop on the back of anticipated smaller safrinha crop acreage, taking it to 92 million mt.

Domestically, the main contribution of the US was to trim corn feed usage figures by 55 million bushels (1.4 millon mt) and increase ending stocks by the same amount to 2.182 billion bushels.

While that redressed some of the supportive factors borne of production cuts, the revision was expected and came in below the average estimate of 2.189 billion bushel.

Corn futures contracts, which had been trending lower during the day, revived moderately in the trading that followed immediately after the release, gaining just under a cent along much of the curve.