Brazil’s corn stocks have reportedly plummeted to a 25-year low, contrasting with USDA’s delayed expectations for a similar decline. The ongoing discrepancies between USDA and Brazil’s Conab about corn production and demand reflect broader market concerns. Given expected world supply pressures, accurate assessments are vital for understanding the agricultural landscape ahead.
In a recent analysis, Karen Braun discusses the conflicting reports regarding Brazil’s corn stocks, which have reached their lowest levels in 25 years, according to Brazil’s statistics agency. Conversely, the U.S. Department of Agriculture (USDA) does not expect this situation to develop until early next year. The discrepancies between these two agencies play a significant role in understanding Brazil’s agricultural outlook.
The crux of the disagreement lies in the differing methodologies used by the USDA and Brazil’s equivalent agency, Conab. These differences exist both in production forecasts and in demand estimates, making it challenging to identify a definitive resolution. As world corn supplies are projected to fall near three-decade lows, it becomes imperative to analyze Brazil’s corn market dynamics closely.
Understanding the distinct marketing years is essential for interpreting these forecasts. Conab’s 2024-25 marketing year concludes on January 31, 2026, while the USDA extends an additional month. The USDA’s world corn balance sheet encompasses various local marketing years, reflecting a broader time frame that affects stock assessments.
Recently, the USDA maintained its estimate for Brazil’s 2024-25 corn crop at 126 million metric tons, but reduced its 2023-24 harvest forecast by 3 million tons to 119 million. In comparison, Conab slightly adjusted its 2024-25 crop estimate to 122.76 million tons while keeping the previous year’s figure stable. This brings the agencies closer together, though USDA’s estimates remain consistently higher than Conab’s in recent years.
Currently, Conab reports that Brazilian corn supplies are critically low, with stocks for the 2023-24 season at approximately 2 million tons, marking a historical low. Projections suggest a recovery to 5.5 million tons by next January. Meanwhile, USDA estimates current stocks at 7.5 million tons, but anticipates a significant decrease to just under 3 million tons for the 2024-25 season, potentially positioning it at a 42-year low.
The contrast in the two agencies’ marketing year schedules and their differing perspectives on exports contribute to these discrepancies. The USDA is optimistic about Brazil’s export potential, estimating exports could reach around one-third of production, whereas Conab’s figures remain closer to 30%. Given the existing export limitations and potential harvest yields, the year ahead could present challenges for Brazil’s corn supply and market dynamics.
The conflicting reports on Brazil’s corn stocks highlight significant disparities between USDA and Conab estimates. While Conab points to critically low supplies, the USDA maintains a slightly more optimistic outlook. As the global corn market faces pressures from dwindling stocks, understanding these differences is crucial for stakeholders in agriculture. The ongoing developments will be essential to watch as both agencies release further forecasts this year.
Original Source: www.livemint.com
