April 27, 2022

USDA expects higher corn output in 2021/22 even as global trade dips

The United States Department of Agriculture (USDA) released its new monthly supply and demand reports for grains and oilseeds this month, in which significant cuts were again made for soybean crops in South America, while for corn the figures were presented without major changes.

Globally, the USDA estimates that corn production will reach 1,210.5 million tonnes (Mt) for the 2021/22 marketing year, which is 7.5% higher compared to 2020/21 (1,125.9Mt). This increase is explained by greater harvests in Brazil, the European Union, Indonesia and Pakistan.

On the other hand, global trade has decreased, mainly due to lower exports from Serbia and Ukraine, but this is partially offset by an increase in export activity from Brazil, Canada and India. Likewise, global imports have decreased due to lower demand from China.

For the US, production remains at around 383.9Mt, with a 7.1% increase compared to the previous crop (358.4Mt). China is expected to increase its domestic supply by 4.6%, reaching 272.6Mt. Brazil's production volume is expected to reach 116Mt, an increase of 33.3% compared to the 2020/21 season (87Mt). The EU and Argentina have expected volumes of 70.5Mt and 53Mt, which represent increases of 5% and 1.9% over the previous crop, respectively.

As for international trade, it is estimated that world grain exports will increase by 8.2%, from 182.1Mt in the 2020/21 season to 197Mt in the current cycle. This would be due to the increase in export volumes from Brazil (44.5Mt, +111.7%) and the EU (4.9Mt, +31.2%), which would offset the decline expected for the US, which is expected to reduce its shipments abroad by 9.2%, from 69.9Mt to 63.5Mt.

Finally, China is expected to decrease its corn imports by 22.1%, reaching 23Mt, offset by an increase in domestic production (272.6Mt +4.6%).

For soybean, global production is expected to decrease by 4.6% compared to the 2020/21 season, from 367.8Mt to 350.7Mt. This decrease is due to the drought which has going on for several months in the producing regions of South America, a situation which has greatly affected crop yields. World trade is also expected to decline due to lower soybean exports from Paraguay, Russia and Ukraine.

The US is expected to continue to be the country with the highest volume growth among the leading producers (+5.2%), increasing from 114.7Mt to 120.7Mt. On the other hand, the production estimates for Brazil and Argentina's crops were once again reduced by 10.4% and 5.8%, respectively, compared to the previous cycle, with volumes of around 125Mt and 43.5Mt, respectively.

Export activity will continue to be led by Brazil with 82.8Mt, up only 1.3% with respect to the previous season, while the US will reach an export volume of 57.6Mt, down 6.4% with respect to the previous crop. China will continue to be the world's main oilseed importer with 91Mt.

- 333 Latin America