World Corn Supply
USDA released its November World Agriculture Supply and Demand Estimates with amended supply and demand expectations for the 2020/21 marketing year. Largely in response to Chinese imports, U.S. corn exports increased this month compared to last. Corn and soybean supplies were lowered as expected yields were reduced for both crops. Anticipating higher export levels and lower yields, price expectations rose for the second month in a row. Today’s article reviews the November WASDE updates.
Some of the main highlights include big changes to U.S. corn export expectations, which grew by 325 million bushels, going from 2.3 billion bushels to 2.6 billion bushels. If these expectations are fulfilled, it would be the largest amount of corn the U.S. has exported on record. This bump in U.S. corn exports is largely driven by the increase of Chinese imports from 7 MMT to 13 MMT, some of which is expected to come from the U.S. If realized, it would be the largest amount of corn China has imported on record (i.e. China Could Be Looking to Import More Corn). USDA has stated that though there have not been any public statements regarding the Chinese corn import quota, shipment data for exporting countries through early November indicates China will exceed the current tariff-rate quota of 7.2 MMT. However, there are rumors China has increased the TRQ by 5 MMT through December. If the TRQ is not lifted, any additional corn China imports above the TRQ could be subject to a tariff of up to 65% of the purchase price.