LONDON, ENGLAND – Coarse grains markets have been bolstered by reduced supply forecasts in recent weeks. However, talk from Russia, notably in a speech by President Vladimir Putin on Sept. 7, calling into question the United Nations-brokered deal, which is currently allowing grain shipments through the Black Sea, has injected a mix of bullish impetus and jitters at times.  

In the World Agricultural Supply and Demand Estimates (WASDE) report of Sept. 12, the USDA put 2022-23 US maize production at 354.19 million tonnes, down from its month-earlier estimate of 364.73 million because of reductions in projected area and yield. Outside the United States, the “coarse grain outlook is for larger production, higher trade, and increased stocks relative to last month,” the USDA said. “Foreign corn production is forecast higher with increases for China, Ukraine, Canada and Mozambique more than offsetting reductions for the EU and Serbia.”

A rise in forecast Chinese production was put in “as abundant rainfall in key Northeast provinces and the North China Plain boost yield prospects,” the USDA said.

The forecast for Ukraine was raised on increased yield expectations, with that for Canada put up on the basis of higher area.

“EU corn production is lowered based on reductions for France, Romania and Germany,” the USDA added. “Foreign barley production is higher with larger production in Russia and Australia more than offsetting a decline for Syria.”

Major global coarse grain trade changes for 2022-23 include larger corn exports for Ukraine but a reduction for the United States, the USDA said.

“Foreign corn ending stocks are raised 2.2 million tonnes, to 273.6 million, mostly reflecting increases for China and India that are partially offset by declines for Ukraine, the EU and Thailand,” the USDA said. “World corn ending stocks, at 304.5 million tonnes, are down 2.2 million.”

Overall, the USDA cut its forecast 2022-23 world crop of maize from 1.179.61 billion tonnes forecast in August to 1.172.58 billion in September.

On Sept. 15, the US Grains Council, in its Market Perspectives report, noted a fall of 1.1% in December maize futures over the preceding week, with the market rallying after the USDA’s report and then fading.

“The WASDE was slightly bullish corn, but the real surprise was the cut to US soybean yields and ending stocks, which helped create spillover buying in corn,” the USGC said. “Since the WASDE, traders and analysts have been increasingly focused on the US export program as well as the crop’s final push toward harvest.”

The European maize sector organization CEPM explained in is Corn Market report on Sept. 13 that “the progress of the Ukrainian army in the Donbass led Russian officials to threaten the sustainability of the Odesa maritime corridor last week, causing maize prices to rise.”

“To date, nearly 2 million tonnes of agricultural products have been exported through Odesa, a figure that remains insufficient in view of the country’s storage deficit ahead of the maize and sunflower harvests,” CEPM said.

In its Aug. 18 Grain Market Report, the International Grains Council (IGC) said its index for maize had risen by a net 3% over the preceding month, “with increases in South America more than compensating for a modest pullback in US prices.” 

“The partial resumption of shipments from three Black Sea ports in Ukraine weighed slightly at the start of August, but exerted little pressure thereafter,” the IGC noted.

Barley prices decreased by a net 5% month-over-month on a seasonal increase in Northern Hemisphere supplies and spillover from outside markets, the IGC said. Amid continued slow buying interest, export prices remained largely nominal.

Thin demand sent US sorghum prices lower despite a strong maize market, while the US oats contract for December weakened by 11%.