March 7, 2024

 

Global corn stockpiles set to reach five-year highs this year

 

 

The world's corn stockpiles could hit five-year highs later in 2024, as they experienced their biggest annual expansion in seven years, said Reuters analyst Karen Braun.

 

As for the United States, its contribution to the growth is bigger than usual following a record harvest last summer.

 

"That would usually spur a bit more US demand than is currently projected for 2023-24, though ample supplies in rival exporters have cut into US market dominance, suggesting last year's huge US corn acreage was excessive," Braun noted. "However, this anomaly should correct in 2024-25, which starts September 1 for the United States."

 

Global corn ending stocks in the 2023-24 period is expected to increase by 7%  on the year even as US stocks are destined for a 60% rise, based on estimates by the US Department of Agriculture (USDA).

 

"That is the most lopsided, US-heavy growth since 2004-05, when US corn supplies exploded by 120% and global ones rose a more modest 25%," Braun pointed out.

 

She believes overproduction in 2004 and 2023 explains the significant increase of US corn supplies.

 

"...excluding US supplies, global corn stocks in 2004-05 fell more than 3%, and they are seen rising fractionally in 2023-24," Braun said.

 

In the 2024-25 period, US corn ending stocks will reach 37-year highs, rising another 17% from 2024, according to the USDA.

 

"But at that rate, global corn stocks in 2024-25 could be flat on the year and still align with "normal" trends, so a second straight anomalous year for US stockpiles is unlikely," Braun highlighted.

 

US corn plantings in 2023 were at a 10-year high of 94.6 million acres, a 7% rise from 2022.

 

Meanwhile, the US and Brazil are expected to take up around 27% of global corn exports in 2023-24.

- Reuters