Brazil’s corn supplies have reached the lowest levels in 25 years as reported by Conab, contrary to the USDA’s projections, which expect declines in 2024-25. The two agencies differ significantly in their assessments due to varying methodologies and timelines. The USDA maintains a more optimistic view on export potential compared to Conab, though both recognize the pressing need for strong crop performances moving forward.
Brazil is currently experiencing its lowest corn supplies in over 25 years, according to the country’s statistics agency, Conab. In contrast, the U.S. Department of Agriculture (USDA) does not anticipate such a scenario until early next year. This disparity between the two agencies has previously led to controversies surrounding their estimates of Brazil’s agricultural outputs, particularly for corn and soybean harvests.
The differing estimates of production and demand between USDA and Conab illustrate that there may not be a definitive answer regarding Brazil’s corn stocks. With anticipated global corn supplies nearing three-decade lows, shedding light on Brazil’s situation is essential. The two agencies operate on different marketing years, with Conab’s cycle ending on January 31, 2026, while USDA’s ends one month later, resulting in different timelines for reporting corn stock evaluations.
USDA has maintained its forecast for Brazil’s 2024-25 corn crop at 126 million metric tons, while reducing the previous estimate for the 2023-24 harvest by 3 million tons to 119 million. Conversely, Conab has adjusted its estimate for the 2024-25 crop slightly up to 122.76 million tons, leaving the estimate for last year unchanged. These adjustments have resulted in a narrowing gap between the agencies’ forecasts.
Current corn supplies are regarded as tight by Conab, which records stocks around 2 million tons for the 2023-24 period, representing a historic low. The agency predicts a recovery of stocks to approximately 5.5 million tons by January, which is still below the decade-average. As of late February, USDA estimated Brazil’s corn stocks at 7.5 million tons, projecting a decrease to below 3 million tons for 2024-25, marking a 23-year low.
The discrepancy in estimates may stem partially from the one-month difference in the agencies’ marketing years. While Brazil’s exports typically reach a maximum of 4% of its annual volume in February, domestic consumption remains significantly higher. USDA appears more optimistic about Brazil’s export potential compared to Conab. Despite current exports being relatively low, the future of Brazil’s corn export capability will depend on upcoming harvests domestically and in the United States, the leading exporter.
Both USDA and Conab’s projections for reduced Brazilian corn supplies due to dwindling stockpiles underscore the market’s concerns, indicating the pressing need for this agricultural cycle to perform optimally.
The contrasting corn stock estimates provided by Brazil’s Conab and the U.S. Department of Agriculture epitomize a wider debate over agricultural forecasting practices. While Conab indicates a significant tightening of supplies currently, USDA foresees future challenges with Brazilian corn stocks at historically low levels. This discrepancy highlights crucial market pressures and the need for observant monitoring of coming crop performances to address these declines.
Original Source: www.livemint.com
