Country News
Brazil: Conab raised its 2017 corn production estimate by nearly 3 MMT 87.409 MMT. If realized, it will be a 31 percent larger output than last year’s crop. USDA kept its forecast for Brazilian production at 86.5 MMT. (Reuters)
China: Feed mills in the northeast provinces are being subsidized to buy corn from farmers and Beijing is encouraging provinces to undertake their own measures. Removing the price support has lowered prices and domestic corn is expected to be competitive until at least July; further boosting domestic corn disappearance are the antidumping duties imposed on U.S. distiller’s dried grains. As a result, CNGOIC boosted its forecast of domestic corn use by 21 MMT.
Speculators are piling into Dalian corn futures in expectation that the government will successfully drive down the supply/demand ratio. They have pushed corn futures to an 18-month high (up 20 percent since September 30). Still, some contend that the increased demand does not significantly change the market fundamentally since there is still a huge surplus. The government intends to drive down corn production by -670,000 hectares (-4 percent) to 215 MMT this coming season. Corn imports this year are forecast at 800 KMT, though USDA still predicts it will be 3 MMT. (Reuters; Bloomberg)
Saudi Arabia: State grain buyer Saudi Grains Organization (SAGO) purchased 1.5 MMT of animal feed barley in a tender. This is the second purchase of its kind since SAGO took responsibility for supplies in October. (Reuters)
South Africa: Assuming armyworms are managed properly, wet weather is expected to boost corn production by 60 percent over last year’s drought burdened crop. Instead of importing 3 MMT of corn like it did last year, South Africa may be exporting 1 MMT of corn in 2016-2017. (WorldGrain)