February 10, 2012
USDA said Thursday (Feb 9) that Argentina's corn fields, due to poor weather, has pushed the production forecast lower than expected and reducing the country's ability to export.
The weakened Argentine crop will increase demand on US supply, USDA said.
Argentina will produce just 22 million tonnes of corn for the 2011-12 marketing year, the USDA said in its February edition of the monthly World Agricultural Supply and Demand Estimates report. That's four million tonnes less than USDA was predicting a month ago.
The USDA said it made the forecast cut after field reports showed "high temperatures and excessive dryness during pollination in late December and early January resulted in irreversible damage to early corn in the central growing region."
Corn that was planted late in Argentina could make up for some of the loss, the USDA said, but more rain will be needed. The forecast for Argentina's corn exports was cut to 14 million tonnes, down from USDA's January prediction of 18.5 million tonnes.
The smaller corn crop in Argentina means more buyers will be looking to the US, the USDA said, and raised its forecast for US corn exports to 1.7 billion bushels.
"US corn exports are projected 50 million bushels higher with reduced supplies in Argentina and recent increases in both [US] sales and shipments," USDA said in the report.
The additional export demand on the US crop prompted the USDA to lower its estimate for corn ending stocks to 801 million bushels, down from last month's prediction of 846 million bushels.
Federal forecasters raised their outlook for US corn exports Thursday, expecting shipments to jump as Argentina's crop falls short. The USDA also projected US wheat exports to rise as global demand for the grain among livestock producers strengthens.
The February crop report tends to provide little new information, since the South American harvest hasn't yet begun and US farmers are still weeks, if not months, away from starting to plant their next crop.