Brazil’s corn stocks recently reached a 25-year low, according to local statistics, while USDA anticipates issues may not arise until next year. The contrasting estimates from USDA and Brazil’s Conab reflect differing assessments of production and demand. Both agencies foresee tight supplies, complicating export and consumption forecasts ahead.
As of early March, Brazil’s corn supplies have reached a 25-year low, according to Brazil’s national statistics agency. In contrast, the U.S. Department of Agriculture (USDA) does not anticipate similar issues until next year. This discrepancy highlights a recurring conflict between USDA and its Brazilian counterpart, Conab, regarding corn and soybean harvest estimates.
The differences arise from contrasting assessments of production and demand between USDA and Conab. Therefore, neither agency may have an absolute correct estimate due to varying interpretations of data, particularly regarding anticipated world corn supply, which is projected to hit near 30-year lows later this year.
Understanding the time frames is crucial. The Brazilian marketing year, reported by Conab, for 2024-25 ends on January 31, 2026, while USDA’s year concludes a month later. USDA’s global balance sheet represents a compilation over several months rather than a specific point in time.
Recently, USDA kept the Brazilian corn crop estimate for 2024-25 at 126 million metric tons but reduced its 2023-24 forecast to 119 million. Conversely, Conab slightly raised its 2024-25 estimate to approximately 122.76 million tons, maintaining last year’s estimate at 115.7 million tons, narrowing the gap between their forecasts.
Conab currently reports tight corn supplies, estimating around 2 million tons for 2023-24, marking the lowest since 1999. They project recovery to 5.5 million tons next January. USDA, however, puts Brazil’s February stocks at 7.5 million tons, with projections for 2024-25 stocks to plunge further.
The one-month difference in marketing year end dates likely contributes to these discrepancies. USDA’s more optimistic export predictions—averaging one-third of Brazil’s production, compared to Conab’s 30%—reflect current trends, as recent exports show below-average performance. Success will depend on Brazil’s upcoming crops and U.S. harvest outcomes. Both agencies agree on potential corn supply shortages, highlighting market apprehensions over dwindling stockpiles amid ongoing agricultural pressures.
The ongoing debate over Brazil’s corn stock levels demonstrates significant discrepancies between Conab and USDA forecasts, primarily influenced by different marketing year timelines and assessments of supply and demand. While both agencies predict tight corn supplies, they differ in the timing and extent of these challenges, potentially affecting market dynamics and export forecasts. Understanding these nuances is critical for stakeholders in the agricultural sector as they navigate supply concerns and market pressures in the coming year.
Original Source: www.livemint.com
