March 11, 2010

US corn exports seen lower on firm overseas competition

Stiff foreign competition is the reason the USDA lowered its forecast for US exports by 100 million bushels.

The USDA said Wednesday (March 10) it is now predicting US corn exports for the 2009-10 marketing year will total just 1.9 billion bushels, down from the February forecast of two billion bushels.

"US corn exports are lowered 100 million bushels as larger foreign supplies increase competition," the USDA said in its monthly World Agricultural Supply and Demand Estimates report.

Sizeable increases in corn production were predicted for Argentina and South Africa.

Argentina is now predicted to produce 21 million tonnes of corn, up from last month's forecast of 17.2 million tonnes, and the country is also exporting more than expected. The new export forecast for Argentina is 12 million tonnes, up from 9.5 million tonnes.

South Africa is now expected to produce 13.5 million tonnes of corn and export 2.5 million tonnes, up from 11.5 million tonnes and 1.5 million tonnes, respectively.

Meanwhile, the USDA supply and demand report was deemed bearish for CBOT corn and wheat futures, according to traders and analysts. The new March carryout prediction is for 1.799 billion bushels, up from 1.719 billion bushels.

Corn futures are forecast to open 3-5 cents lower, and wheat is called 2-4 cents lower. The jump in domestic ending stocks for corn and wheat should pressure both markets, traders said.