The U.S. Department of Agriculture forecast a drop in exports in its December World Agriculture Supply and Demand Estimates released last week.
The report projects a 100 million bushel reduction in U.S. corn exports, dropping its export estimate to 1.9 billion bushels. The report cited increased exports from China and Ukraine as the reason for the reduction. Although the export number fell from the November forecast, corn exports are still expected to outpace last year by approximately 85 million bushels. The reduction in exports was matched by a 100 million bushel increase in stocks, now forecasted at 2.4 billion bushels. The carryover represents 52% of global corn stocks.
"Despite the projected reduction in exports, corn growers will still export more corn than last year," says Paul Bertels, National Corn Growers Association director of biotechnology and economic analysis.
The WASDE report projects Chinese exports to rise to 6 million metric tonnes (MMT) (236 million bushels), up 3 MMT (118 million bushels) in November. The higher forecast is a result of a 4 MMT increase in Chinese corn production, which is expected to hit 130 MMT. Although the Chinese government does not publish carryover projections, USDA estimates them at 26.3 MMT, or 22% of global stocks.
A report released Tuesday by the USDA Economic Research Service says although exports were slow during the first months of the new marketing year, corn exports should pick up. The slow start was caused by consequences of Hurricane Katrina, which caused port closures in New Orleans and barge and rail bottlenecks.
"The 2005/06 U.S. corn export estimate is still up over 3 million tons from last year, and corn sales in the rest of the year are expected to be strong," the report adds.