Drought still impacts corn growers

Agricultural , Brazil , Commodities , Corn , Russia , USA Feb 12, 2014 No Comments

CornThe drought that impacted the United States and the countries around the Black Sea seems to be a thing of the past. The picture is quite different for South America where hot and dry conditions in parts ot the continent make the size of its corn crop uncertain.

The United States are currently the country in the best position to meet the global demand for corn, according to the U.S. Department of Agriculture in its Feb 10th World Agricultural Supply and Demand Estimates report. The USA should confirm at the end of the 2013-2014 campaign their rank of world leading producer with 353.72 million tonnes, up 29.1% compared with the 2012-2013 campaign. After falling sharply in 2012-2013 to 18.2 Mt, exports should rebound to 41 Mt. They were at 38.4 Mt in 2011-2012.

Impacted by the 2012-2013 drought, the Ukrainian production is set to significantly increase by the end of the 2013-2014 campaign. It should reach a record 30.9 Mt, up 48% year on year. Good climatic conditions and an increase in the use of hybrid corn seeds, which allowed in about 10 years to double corn yields, boosted crop development in recent months. Russian production is set to increase by 30% to 10.6 Mt.

On the other hand, the forecast is quite pessimistic for Brazil (-13.58% to 70 Mt) and Argentina (-9.43% at 24 Mt). A drought in December and January impacted crop development in Argentina, reduced expected plantings and trimmed yield prospects. To limit the effects, over 50% of the corn was planted later than usual. The harvest of these crops, which will take place next summer, will likely occur at a higher than normal humidity level. In Brazil, Companhia Nacional de Abastecimento (CONAB) lowered its production estimates to 75.47 Mt because, again, of a drought in the south-east and center-west of the country.

Pascal Blanc

Pascal has implemented numerous software solutions in the areas of procurement, sourcing, spend management, supplier evaluation and performance. His clients include Fortune 500 companies in Europe, Asia and North America. He is a co-founder of Source & Procure.

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