Cheaper corn may revive demand from importers including China that allowed stockpiles to diminish when prices were high, said Jeff Hainline, the president of Advance Trading Inc. in Bloomington, Illinois. Midwest farmers won’t plant until late this month, and lingering drought in Iowa, Minnesota, Nebraska and South Dakota means more risk the harvest in October will fall short of the government’s target, he said.
The cost of importing U.S. corn in China is less expensive than domestic supply, data from Shanghai JC Intelligence Co. show. Sales of U.S. corn for delivery after the harvest begins reached 2.47 million tons on March 28, 34% higher than a year earlier, USDA data show.
The world is less dependent on U.S. corn, with its market share dropping to 24% this year, from more than 33% a year earlier, government data show. Argentina, the second-largest exporter, will boost output by 23% to 25.74 million tons, and Brazil will reap its second-largest crop ever, according to a Bloomberg survey.
Global inventories before this year’s Northern Hemisphere harvests will total 120.41 million tons, according to a Bloomberg survey of 18 analysts. While that’s down from 131 million a year earlier, it would be 2.5% more than forecast in March.
The USDA said March 28 that domestic inventories on March 1 were 8.1% bigger than analysts had forecast. Prices fell 13% in two days and reached $6.265 on April 5, the lowest since June 29.
The government also said that farmers intend to plant 97.282 million acres this year, the most since 1936. Assuming normal weather patterns, global corn production will climb 15% to a record 975.65 million tons in the year beginning July 1, from 851.58 million tons a year earlier, Informa Economics Inc. said in an April 3 report.