March 14, 2007

Record corn trade in 2006/07 despite high prices
 

Projected 2006/07 (October-September) world corn trade increased 1.0 million tonnes this month to 85.0 million. Corn exports for Brazil and Argentina were each increased 0.5 million tonnes due to increased production prospects.

Brazil's export prospects in the 2006/07 marketing year (April 2007-March 2008) increased 1.5 million tonnes to a record 6.5 million, but much of that is expected to be exported after October 1, 2007, falling into the 2007/08 world trade year. In contrast, stronger-than-expected old-crop corn shipments were the basis for the increase in Argentina's 2006/07 (October-September) exports.

Corn import forecasts were increased 0.5 million tonnes each for the EU-25 and Mexico. Mexico is projected to import a record 8.0 million tons as high internal prices are encouraging the government to increase import quotas. Also, reduced availability of US sorghum is causing a shift to corn imports. The EU-25 has increased corn import licenses more than earlier expected. South Africa's corn imports were also increased, but much more for the local marketing year than for the trade year because most of the imports are expected to arrive after October 1, 2007.

US 2006/07 corn exports remained unchanged this month at 56 million tonnes (2.25 billion bushels for the September-August local marketing year). Shipments during the first half of the year have been strong, with census data through January indicating a significant year-to-year increase. Also, grain export inspections during February indicated an increase of more than 20 percent for the month. As of March 1, 2007, outstanding export sales of corn were 10.7 million tons, up 1.5 million over a year earlier. However, increased competition from record corn crops in Argentina and Brazil are expected to slow US corn exports dramatically during the last months of 2006/07.