The global corn market is supplied primarily by four countries – Argentina, Brazil, Ukraine, and the United States. Combined, these countries account for nearly 90 percent of global exports. This month, U.S. exports are forecast higher to reflect continued strong foreign demand and limited supplies in Ukraine and Brazil.
U.S. corn exports are forecast up 3.0 million tons to 73.0 million for 2020/21 (Oct-Sep). If realized, the volume would be the largest in history. The previous record was 63.7 million tons in 2017/18. For the first half of the current trade year, the export pace was well ahead of previous levels with large volumes to China and many other destinations.
The pace of U.S. corn inspections for exports is still brisk according to export inspections data for May, totaling nearly 8.2 million tons, of which roughly 40 percent is destined to China.
For Ukraine, its exports to China have more than doubled from a year ago despite smaller available supplies. This has left countries in North Africa, Middle East, and Asia to look to the United States for corn.
For Brazil, exports are lowered this month reflecting persistent dry conditions in several states where the second-crop corn is produced. The second-crop corn, particularly in the Center-West, is primarily destined for overseas markets, while the first-crop corn is used in the domestic market.
U.S. corn exports are expected to be robust for the remainder of the year with large sales on the books. Unfavorable crop prospects in Brazil could be supportive of U.S. exports into early 2021/22 (Oct-Sep). However, with the current forecast of larger exports for Argentina, Brazil, and Ukraine, U.S. exports are projected to decline for 2021/22. Still, this would be the third-largest exports on record.
Chinese Demand Shapes Global Barley Trade
China import demand for coarse grains is not limited to corn and sorghum. This month, barley imports are forecast higher, reflecting trade to date. For the first 7 months in 2020/21 (Oct-Sep), imports totaled 7.0 million tons, well above previous years’ levels.
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Imported barley, mainly from Canada, the European Union, and Ukraine, has been used in the domestic beer industry and as a substitute for corn in feed rations, particularly in the southern region. Barley imports are not subject to a tariff-rate quota and are therefore administratively less burdensome.
With greater demand from China, global imports are forecast higher for both 2020/21 and 2021/22 from last month. While the antidumping and countervailing duties on barley from Australia remain in place, China has been successful in securing alternative sources for barley.
Meanwhile, barley from Australia has found new markets around the world, primarily in Southeast Asia, the Middle East, and Mexico. In the Red Sea, ships carrying barley from the European Union and Ukraine to China are crossing paths with ships loaded with Australian barley destined for the Middle East.
These trade dynamics are likely to be in place for a few more years due to China’s 5-year action on barley from Australia.