September 13, 2010

Global corn imports to show significant increase

Global corn imports will surge on expectations of increased demand from the EU and Russia.

Although USDA forecasts a slight reduction in the US crop this month, the US still has supplies of corn to meet this higher demand.

Through early September, US corn export prices rallied over US$30/tonne to US$221/tonne, the highest level since late September 2008. The jump in prices is a result of continued concern over shrinking Russian grain supplies, disappointing early harvest results in the US, and strong US export sales to traditional markets such as Japan and Mexico.

Brazilian and Argentine quotes were also sharply higher on strong import demand from the Middle East, North Africa, parts of Southeast Asia, and prospects for the EU.

US corn is boosted by 1.5 million tonnes to 53.5 million as a result of expanding global feed grain demand and will likely backfill in Asian and some North African countries, as Ukrainian and South American corn covers new demand from Russia and the EU.

Brazilian corn is up 500,000 tonnes to nine million on greater exportable supplies.

Ukrainian corn is raised 500,000 tonnes to 5.5 million due to strong demand from Russia.