Ukraine, US to drive global corn supply drop: USDA

Global corn production, use and ending stocks are expected to fall in the 2022-23 marketing year, driven by the war in Ukraine and delayed crop planting in the US, according to the US Department of Agriculture (USDA).

World corn output is forecast to drop to 1.18bn metric tonnes, down by 34.9bn t from the prior marketing year's record high, according to the USDA's latest World Agricultural Supply and Demand Estimates report.

Global corn use is expected to decline by 1.2pc to 1.18bn t, and exports are projected to fall by 2.3pc to 183mn t.

Lower production in the US and Ukraine are key driving forces behind the reduced global supply. In the US, weather-driven planting delays are reducing yield prospects, with the USDA trimming its expectation for 2022-23 marketing year yields to 177 bushels/acre, down by 4 bu/acre from its initial February outlook. US corn production is projected to drop to 367.3mn t, down by 4.3pc from the prior marketing year, while US exports are forecast to decline by 4pc from a year earlier to 61mn t amid robust domestic demand.

The USDA expects 5.38bn bushels of corn will be used for domestic ethanol production, unchanged from the prior marketing year, on expectations of steady US motor gasoline demand.

The war in Ukraine is causing major disruption to global crop supplies, and the USDA expects Ukrainian exports will tumble by 61pc in the 2022-23 marketing year to 9mn t, down from 23mn t a year earlier. Ukrainian corn production is projected to similarly crash, falling by nearly 23mn t to 19.5mn t.

Brazil and Argentina are expected to mitigate some of the declines, with production forecast to increase to 55mn t and 126mn t, respectively, while corn exports are projected to rise to records of 41mn t and 47mn t, respectively.

Global corn ending stocks are expected to drop by 4.26mn t from the prior marketing year to 305.1mn t, mostly reflecting declines in China and the US, according to the USDA.

China corn production in the 2022-23 marketing year is expected to fall slightly to 271mn t, and the country's imports are expected to slip to 18mn t on reduced Ukrainian supply. China's corn use is expected to increased slightly to 295mn t, while ending stocks are projected to drop by 6mn t to 204mn t.

By Sarah Tucker