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WorldCornMarketSupply-DemandTrends

Daniel OBrien Extension Agricultural Economist

KState Research and Extension

May 27, 2010

Theworldcornmarkethasmanyparticipants,butasmallnumberoflargercornproducersandexportershavea

dominatinginfluenceonglobalcornsupplydemandbalances. MajorexportingcountriessuchastheUnited

States,Argentina,Brazil,andtheUkraine,andleadingimporterssuchasJapan,Mexico,SouthKorea,Eqypt,

Taiwan,ColumbiaandIranimpactworldcornmarketpricesthroughtheleadingrolestheyplayinworldcorn

trade. Othercountriesareheavilyinvolvedincornproductionanduse,buthavenotconsistentlybeenimportant

participantsinworldcorntrade,suchasChina,theEuropeanUnion,IndiaandSouthAfrica.

TheUnitedStatesandChinaarekeyparticipantsintheworldcornmarket,butfordifferentreasons. TheUnited

Statesistheworldslargestproducerofcorn,supplyinganaverageof40%oftheworldcorncropoverthelast3

marketingyears(MYs). TheU.S.alsoistheworldslargestcornexporter(57%3MYaverage),andthelargestuser

ofcornforallpurposesusing34%ofallcornusedonaveragesinceMY200809. TheU.S.hasaccountedfor

44%of

world

corn

for

food,

seed

and

industrial

use

and

28%

of

world

corn

livestock

feed

use

over

the

same

time

period. SinceMY200809,theU.S.hasheldonaverage30%ofworldcornendingstocks,2ndbehindChina. Over

thesametimeperiod,Chinahasbeenthe2ndlargestproducerofcorn(20%ofworldcornproduction),the2nd

largestuserofcornforallpurposes(19%),the2ndlargestuserofcornforfood,seedandindustrialuses(15%),

andthe2ndlargestuserofcornforlivestockfeeding(22%). Chinahasranked1stgloballyintermscornending

stocks,holdinganaverageof37%ofworldcornendingstockssinceMY200809morethanthe30%heldbythe

UnitedStates.

ThisarticleexaminesworldcornsupplydemandtrendsforMY198788throughMY201011onacountryby

countrybasis. AllworldcornsupplydemandestimateswereobtainedviacustomqueriesonProduction,Supply

andDemandOnline(PS&DOnline)throughtheUSDAForeignAgriculturalService

(http://www.fas.usda.gov/psdonline/psdQuery.aspx). ProjectionsfromtheMay11,2010WorldAgricultural

SupplyDemand

Estimates

(WASDE)

from

the

USDA

World

Agricultural

Outlook

Board

(http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1194)areincludedinthis

report. ProjectedcornsupplydemandbalancesforMY2010/11areexaminedrelativetohistoricalaveragelevels

andtrendsthroughtime. ThevariabilityoftheseWorldcornsupplydemandmeasuresinrecenthistoryisalso

examined,providingsomemeasureoftheprimarysourcesofriskanduncertaintyinworldcornmarketsinrecent

history.

WorldCornHarvestedArea

TotalworldcornharvestedacreageinMY201011isestimatedtobe159,320,000hectares(393,520,000

acres)(Chart1). Worldcornharvestedacreagehasincreasedfromtherangeof126,108,000126,860,000inMY

198788

and

MY

1988

89

to

the

range

of

156,311,000

160,534,000

since

MY

2007

08,

with

average

annual

trend

increasesof1,353,000hectares(3,343,263acresperyear).

DuringtheMY198788toMY201011period,thetop10countriesintermsofcornproducingareaaccountedfor

anaverageof72%ofworldcornharvestedacreage. SinceMY200809the5largestnationsintermsofaverage

worldcornharvestedacreagearetheUnitedStates(32.4millionhectaresormh),China(30.4mh),Brazil(13.4

mh),theEuropeanUnion(8.5mh)andIndia(8.1mh)(Chart2). Thesecornareastatisticsindicatetheleading

positionsoftheUnitedStatesandChinainworldcornproduction,aswellastheimportanceofBrazilian

productivelandcapacityinregardstocornandothercompetitivecrops.

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SinceMY

2001

02,

Tanzania,

Nigeria

and

South

Africa

have

the

largest

historic

variability

in

corn

area

harvested

relativetotheiraverageharvestedareaamongthetop10nationsintermsofcornarea. Thismeasureofrelative

variabilitycanbeanalyzedintermsofthecoefficientofvariationorcvofharvestedcornacreage.(see

http://en.wikipedia.org/wiki/Coefficient_of_variation). Acoefficientofvariationof1.00indicatesthatameasure

ofthevariabilityofavariable(definedasthestandarddeviation)isequaltotheaveragevalueofthevariable.

Whenthecvvalueislessthan1,itmeansthatthestandarddeviationislessthantheaveragevalueofthe

variable. Lowervaluesofcvareindicativeoflessrelativevariabilityforaparticularvariable(orinthiscase,a

measureofworldcornsupplydemand)thandohighercvvalues.Thecvvaluesforharvestedcornacreagein

Tanzania,NigeriaandSouthAfricaoverthelastdecaderangefrom0.143and0.192.

0

15,000

30,000

45,000

60,000

75,000

90,000

105,000

120,000

135,000

150,000

165,000

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

1,0

00Hectare

s

Marketing

Year

(September

1

August

31)

Chart1.WorldCornHarvestedAcreage198788to200910MarketingYears(1,000Hectares)

RestofWorld

SouthAfrica

Tanzania

Indonesia

Nigeria

Mexico

India

EU27

Brazil

China

UnitedStates

UnitedStates

32,364

21%

China

30,355

19%

Brazil

13,383

9%

EU27

8,509

5%

India

8,133

5%

Mexico

6,916

4%

Nigeria

4,833

3%

Indonesia

3,167

2%

Tanzania

3,100

2%

SouthAfrica

3,049

2%

RestofWorld

44,131

28%

Chart2.WorldCornHarvestedAcreage:3YearAverageAverageof200809to201011MarketingYears(1,000Hectares)

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TheUnitedStates(cv=0.08)hashadlowerrelativevariationinharvestedcornareaofcornsinceMY200102

thanthe3countriesmentionedaboveaswellasChina(cv=0.10). TheU.S.hasequalrelativevariabilityin

harvestedcornacreagetoIndia,butgreatervariabilitythanIndonesia(cv=0.04),theEuropeanUnion(cv=0.05)

andMexico(cv=0.07). Incomparison,aggregateworldcornharvestedacreagehasarelativelylowlevelof

relativevariability(cv=0.06)sinceMY200102. Worldcornharvestedareahasbeengrowingatafairly

consistentratesinceMY198788.

Theseresultsalsoshowthatinthe3mostrecentcornmarketingyear,theUnitedStatesandChinahave

combinedfor

40%

of

World

harvested

corn

area.

Together

with

Brazil,

the

European

Union

and

India,

the

top

5

countriesintermsofharvestedcornacreagehaveaccountedfor59%ofglobalharvestedcornarea. Theworld

cornmarketismarginallymoreconcentratedintermsofharvestedacreagethanistheworldwheatmarket,

wherethetop5countriesaccountfor56%ofworldwheatharvestedacreage.

WorldCornYields

AverageWorldcornyieldsinthe201011marketingyearareestimatedtobe5.24metrictonsperhectare

(mt/ha)(equivalentto83.6bushelsperacre). Worldcornyieldshaveincreasedfrom3.18mt/ha(50.7bu/ac)in

MY198889toover5.0mt/hasinceMY200809,withaverageannualtrendincreasesof0.07mt/ha(1.12bu/ac)

forsinceMY198788.

Amongthe10largestcornproducingcountriesintheWorld,thehighestaveragecornyieldsoverthemostrecent

10year

period

(MY

2001

02

to

MY

2010

11)

were

produced

in

the

United

States

(9.41

mt/ha

or

150.1

bu/ac),

with

yieldstrendingupwardsat0.19mt/ha(3.0bu/ac)peryear(Chart3).ThesecondhighestyieldssinceMY200102

wereproducedinArgentinaat6.96mt/haor111.0bu/ac,withyieldstrendingupwardsat0.18mt/ha(2.9bu/ac)

annually. Duringthesameperiod,cornyieldsintheEuropeanUnionaveraged6.38mt/ha(101.7bu/ac),

increasingatarateof0.08mt/ha(1.3bu/ac)annually.

BelarusandSaudiArabiahavethelargesthistoricrelativevariabilityincornyieldssince200102,withcv

measuresof0.44and0.26,respectively. TheUnitedStates(cv=0.19)hashadnearlyequalyieldvariabilitywith

Vietnam,ArgentinaandUzbekistan,butgreaterrelativeyieldvariabilitythanChina(cv=0.07),andtheEuropean

Union(cv=0.08). Incomparison,aggregateworldcornyieldssincethe200102marketingyearhavearelatively

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

MetricTonsperHectare

MarketingYear

(September

1to

August

31)

Chart3.WorldCornYields198788to201011MarketingYears(MetricTonsperHectare)

UnitedStates

Argentina

EU27

Belarus

Kyrgyzstan

SaudiArabia

China

Australia

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lowlevelofrelativevariability(cv=0.07). Theseworldversusnationcvmeasuresindicatethatannualyield

increasesanddeclinesinindividualcountriesmaytendtooffsetthemselvesovertime.

WorldCornProduction

Worldcornproductioninthe201011marketingyearisprojectedtobe835,033,000metrictons(32,864,513,000

bushels). Notethat1metrictonequals2,204poundsor39.36bushelsofcorn. Worldcornproductionhas

increasedfrom400,413,000mt(15,759,112,000bu.)inMY198889totheprojectedlevelinMY201011

indicatedabove,

with

average

annual

trend

increases

of

16,002,000

mt

(993,736,000

bu.)

since

MY

1987

88.

Worldcornproductionisprojectedtohavegrown109%sinceMY198889.

The10largestcountriesproducedanaverageof85.4%ofworldcornovertheMY198788toMY201011period

(Chart4). SinceMY200809,the7largestcountriesintermsofaverageworldcornproductionweretheUnited

States(326.6mmt,40%ofworldcornproduction),China(162.3mmt,20%ofworldcornproduction),the

EuropeanUnion(58.4mmt),Brazil(51.8mmt),Mexico(23.2mmt),IndiaandArgentina(bothwith19.0mmt)

(Chart5). TheselevelsofcornproductionsupporttheideathatChinaandparticularlytheUnitedStatesplaykey

leadershiprolesindeterminationofworldcornproductionandsupplies.

TheUkraineandSouthAfricahavethelargesthistoricrelativevariabilityincornproductionsinceMY200102,

withcvmeasuresof0.36and0.23,respectively. TheUnitedStates(cv=0.14)hashadlessproductionvariability

thanIndia,

Argentina

and

Brazil

(cv

=0.17

0.18);

equal

production

variability

with

China;

and

more

production

variabilitythanMexico,Canada,andtheEuropeanUnion(cv=0.08 0.11). Incomparison,aggregateWorldcorn

productionhasacvvalueof=0.12sincethe200102marketingyear. BecausetheU.S.andChinatogether

accountfor60%ofworldcornproductionisreasonabletohaveworldhistoriccornproductionvariability(cv=

0.12)approximatelyequaltothatofthesetwoleadcornproducingcountries.

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

1,0

00MetricTons

MarketingYear

(September

1August

31)

Chart4.WorldCornProduction198788to201011MarketingYears(1,000MetricTons)

RestofWorld

Canada

UkraineSouthAfrica

India

Argentina

Mexico

Brazil

EU27

China

UnitedStates

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WorldCorn

Exports

WorldcornexportsinMY201011areprojectedtobe88,527,000mt. Worldcornexportshaveincreasedfrom

59,128,000mtinMY198788toashighas98,614,000mtinMY200607,withaverageannualtrendincreasesof

1,225,000mtsinceMY198788.

The10largestnationsshippedanaverageof95.6%ofWorldcornexportsovertheMY198788toMY201011

period(Chart6). SinceMY200809,the5largestcountriesintermsofaverageworldcornexportswerethe

UnitedStates(49.2mmtor57%ofallWorldcornexports),Argentina(11.8mmt,14%oftotal),Brazil(7.2mmt,

8%oftotal),theUkraine(5.2mmt)andSouthAfrica(2.3mmt)(Chart7). TheUnitedStateshasadominant

marketleadershippositioninworldcornexports,withthenextlargestexportershippingonly25%oftheamount

thattheU.S.does.

Amongthe

worlds

major

exporters

of

corn,

Serbia

and

India

have

the

largest

historic

relative

variability

in

corn

exportssince200102,withcvmeasuresof1.33and1.01,respectively. Othercountrieswithrelativelyhigh

relativevariabilityinannualcornexportsduringthelastdecadeincludetheUkraine(cv=0.74),Paraguay(cv=

0.61),Thailand(cv=0.59),SouthAfrica(cv=0.54),Brazil(cv=0.53),andtheEuropeanUnion(cv=0.48).The

UnitedStates(cv=0.12)hasthelowestcornexportvariabilityamongthetopcornexportersinthelastdecade,

withArgentina(cv=0.17)alsobeingrelativelylowcomparedtootherWorldcornexporters. Incomparison,

aggregateWorldcornexportshaveacvvalueof=0.10sincethe200102marketingyear,indicatingthatthelarge

marketshareoftheU.S.togetherwithArgentina,combinedwiththeircomparativelylowannualexportvariability

andsomewhatoffsettingsupplyavailabilityamongothercornexportingcountriesallworkstogethertoreduce

overallannualvariabilityinworldcornexports.

UnitedStates

326,589

40%

China

162,300

20%EU27

58,363

7%

Brazil

51,833

7%

Mexico

23,342

3%

Argentina

19,000

2%

India

19,010

2%

SouthAfrica

13,022

2%

Ukraine

11,133

1%

Canada

10,217

1%

RestofWorld

119,062

15%

Chart5.WorldCornProduction:3YearAverageAverage200809to201011MarketingYears(1,000metrictons)

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WorldCornImports

Worldcornimportsinthe201011marketingyearareestimatedtobe86,120,000metrictons. Worldcorn

importshaveincreasedfrom57,323,000mtinMY198788toashighas98,489,000mtinMY200607,with

averageannualtrendincreasesof1,200,000mtsinceMY198788.

The10largestcornimportingcountriessecuredanaverageof67.3%ofworldcornimportssinceMY198788

(Chart8). SinceMY200809,the7largestcountriesintermsofaverageworldcornimportswereJapan(16.4

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

1,0

00MetricT

ons

MarketingYear(September1August31)

Chart6.WorldCornExports198788to201011MarketingYears(1,000MetricTons)

RestofWorld

Thailand

Paraguay

EU27

India

Serbia

SouthAfrica

Ukraine

Brazil

Argentina

UnitedStates

UnitedStates

49,173

57%

Argentina

11,773

14%

Brazil

7,212

8%

Ukraine

5,166

6%

SouthAfrica

2,3333%

Serbia

1,656

2%

India

1,869

2%

EU27

1,398

2%

Paraguay

1,303

1%

Thailand

849

1%

RestofWorld

3,769

4%

Chart7.WorldCornExports:3YearAverageAverageof200809to201011MarketingYears(1,000MetricTons)

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mmt,20%oftotalcornimports),Mexico(8.3mmt,10%oftotal),SouthKorea(7.9mmt,9%oftotal),Egypt(5.1

mmt),Taiwan(4.6mmt),Columbia(3.3mmt)andIran(3.3mmt)(Chart9).

AmongtheWorldsmajorimportersofcorn,theEuropeanUnionhasthelargesthistoricrelativevariabilityincorn

importssince200102,withcv=0.83. Othercountrieswithhigherrelativevariabilityinannualcornimportssince

MY200102includeCanada(cv=0.32),Iran(cv=0.28),Mexico(cv=0.26),andColumbia(cv=0.23). Egypt(cv=

0.11)andMayalsia(cv=0.10)havesomewhatlowerannualimportvariability. TheAsiancountriesofSouthKorea

(cv=0.07),Taiwan(cv=0.04)andJapan(cv=0.01)havetheleastamountofrelativeannualvariabilityinworld

cornimports.

On

an

aggregate

basis,

world

corn

imports

have

acv

value

of

=0.10

since

the

2001

02

marketing

year. ExtremelylowannualcornimportvariabilityforSouthKorea,TaiwanandJapanisoffsettosomedegreeby

thegreaterannualimportvariabilityintheEuropeanUnion,Canada,Iran,Mexico,Columbiaandelsewhere.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

1,0

00MetricTons

MarketingYears(September1August31)

Chart8.WorldCornImports198788to201011MarketingYears(1,000MetricTons)

RestofWorld

Canada

EU27

MalaysiaIran

Colombia

Taiwan

Egypt

Korea,South

Mexico

Japan

Japan

16,378

20%

Mexico

8,28810%

Korea,South

7,863

9%Egypt

5,144

6%

Taiwan

4,611

5%

Colombia

3,256

4%

Iran

3,333

4%

Malaysia

2,582

3%

EU27

2,581

3%

Canada

2,114

3%

RestofWorld

27,254

33%

Chart9.WorldCornImports:3YearAverageAverageof200809to201011MarketingYears(1,000MetricTons)

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WorldCornFood,SeedandIndustrialUse

Worldcornfood,seedandindustrial(FSI)use(includingethanolproduction)inthe201011marketingyearis

estimatedtobe332,766,000metrictons. WorldcornFSIusehasincreasedfrom139,837,000mtinMY198788

toaprojectedhighinMY201011listedabove,withaverageannualtrendincreasesof8,039,000mtsinceMY

198788. WorldcornFSIisprojectedtohavegrown138%sinceMY198788.

The10largestcountriesaccountedforanaverageof80.8%ofWorldcornFSIuseovertheMY198788toMY

201011period(Chart10). SinceMY200809,the2largestcountriesintermsofaverageworldcornFSIusewere

theUnitedStates(141.2mmt,44%ofallworldcornFSIuse)andChina(47.0mmt,15%oftotal). Mexico(16.1

mmt),theEuropeanUnion(14.8mmt),andIndia(9.3mmt)followedtheU.S.andChina(Chart11). Thesefigures

indicatethestrongimpactthatgrowthinfeedgrainbasedethanolproductionhashadondomesticcornsupply

demandbalancesintheU.S.inrecentyears.

Amongthetop10countriesusingcornforFSIproduction,theUnitedStateshashadthelargestannualvariability

inFSIuse(cv=0.39),followedbyChina(cv=0.20),Nigeria(cv=0.16),SouthAfrica(cv=0.14),andIndia(cv=

0.13). OthercountrieshavedisplayedlessvariabilityinannualFSIuseincludingIndonesia(cv=0.09),Brazil(cv=

0.085),theEuropeanUnion(cv=0.078),Japan(cv=0.04)andMexico(cv=0.024). VariabilityinFSIuseinthe

UnitedStates

since

MY

2001

02

is

attributable

to

the

rapid

expansion

in

U.S.

grain

based

ethanol

production

in

accordancewithU.S.environmentalandenergypolicies. Takentogether,worldcornFSIusehasacvvalueof

0.22sinceMY200102,indicatingthatthelargestsourceofvariabilityinFSIuseintheWorldcornmarket

originatesintheUnitedStates.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

1,0

00MetricTons

Marketing

Years

(September

1

August

31)

Chart10.WorldCornFSIUse200809through201011MarketingYears(1,000MetricTons)

RestofWorld

Indonesia

Japan

SouthAfrica

Brazil

Nigeria

India

EU27

Mexico

China

UnitedStates

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WorldCornFeed&ResidualUse

WorldcornfeedandresidualuseinMY201011isestimatedtobe492,698,000metrictons. Worldcornfeedand

residualusehasincreasedfrom306,797,000mtinMY198889toahigh496,838,000mtinMY200708,with

averageannualtrendincreasesof7,341,000mtsinceMY198788. Worldcornfeedandresidualuseisprojected

tohavegrown56%sinceMY198788.

The10largestcountriesaccountedforanaverageof79.8%ofworldcornfeedandresidualuseovertheMY1987

88toMY201011period(Chart12). SinceMY200809,the2largestcountriesintermsofaverageWorldcorn

feedandresidualuseweretheUnitedStates(134.9mmt,28%ofallworldcornfeedandresidualuse)andChina

(108.3mmt,

22%

of

total).

The

European

Union

(44.8

mmt),

Brazil

(39.8

mmt),

Mexico

(15.6

mmt)

and

Japan

(11.8mmt)followedtheU.S.andChinainfeedandresidualuse.(Chart13). Thisinformationreinforcesthe

leadershiprolesoftheU.S.andChinainbothworldfeedandresidualuseandinlivestockfeedingindustries.

Amongthetop10countries,Mexicohashadthelargestannualvariabilityincornfeedandresidualuse(cv=

0.21),followedbyIndia,Brazil,andCanada(cvrangeof0.127to0.12). Othercountrieshavedisplayedless

variabilityinannualfeedandresidualuseincludingEgypt(cv=0.08),theEuropeanUnion(cv=0.062),the

UnitedStates(cv=0.057),China(cv=0.055),SouthKorea(cv=0.04)andJapan(cv=0.02).Takentogether,world

cornfeedandresidualusehasacvvalueof0.05sincethe200102marketingyear,indicatingthatlivestock

feedinghasbeenarelativelystableuseforworldcorninthelastdecade.Theavailabilityoffeedgrainsubstitutes

suchasgrainsorghum,barley,oatsordistillersgrainsfromethanolproductionmayalsoimpactthedegreeto

whichcornversuscompetitivealternativesareusedinlivestockfeedrations.

United

States141,173

44%

China

47,000

15%Mexico

16,067

5%

EU27

14,750

5%

India

9,300

3%

Nigeria

7,167

2%

Brazil

7,000

2%

SouthAfrica

5,867

2%

Japan

4,600

2%Indonesia

4,533

1%RestofWorld

60,97119%

Chart11.WorldCornFSIUse:3YearAverageAverageof200809to201011MarketingYears(1,000MetricTons)

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WorldTotalDomesticUseofCorn

Totaldomestic

use

of

World

corn

in

the

2010

11

marketing

year

is

projected

to

be

825,464,000

metric

tons.

Worldcorntotaldomesticusehasincreasedfrom450,832,000mtinMY198889toaprojectedhighinMY2010

11asindicatedabove,withaverageannualtrendincreasesof15,380,000mtsinceMY198788. Worldcorntotal

useisprojectedtohavegrown81%sinceMY198788.

The10largestcountriesaccountedforanaverageof79.3%ofworldtotalcorndomesticuseovertheMY198788

toMY201011period(Chart14). SinceMY200102,the2largestcountriesintermsofaveragetotaluseofWorld

cornweretheUnitedStates(276.1mmt,34%ofallworldcornusage)andChina(155.3mmt,19%oftotal). The

EuropeanUnion(59.6mmt,7%oftotal),Brazil(46.8mmt),Mexico(31.7mmt),India(17.0mmt)andJapan(16.4

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

1,0

00MetricTons

MarketingYears(September1August31)

Chart12.WorldCornFeed&ResidualUse200809through201011MarketingYears(1,000MetricTons)

RestofWorld

Korea,South

Canada

India

Egypt

Japan

Mexico

Brazil

EU27

China

UnitedStates

UnitedStates

134,882

28%

China

108,333

22%EU2744,833

9%

Brazil

39,767

8%

Mexico

15,600

3%

Japan

11,833

3%

Egypt

9,433

2%

India

7,667

2%

Canada

7,578

2%

Korea,South

6,423

1% RestofWorld

98,369

20%

Chart13.WorldCornFeed&ResidualUse:3YearAverageAverageof200809to201011MarketingYears(1,000MetricTons)

8/13/2019 Grain Outlook 05-27-10

11/14

Page|11

mmt)followedtheU.S.andChinaintotaluseofcorn(Chart15). Thestrongmarketleadershippositionsofthe

U.S.andChinainworldcornmarketsareshownintheircombined53%oftotalcornusesinceMY200809.

Amongthetop10cornusingnations,theUnitedStateshashadthelargestannualvariabilityintotalcornuse(cv

=0.13),followedbyIndia(cv=0.12),Brazil(cv=0.115),SouthAfrica(cv=0.112),andMexico(cv=0.10). Interms

ofannualvariabilityintotaluse,thesecountriesarefollowedbyChina(cv=0.093),Egypt(cv=0.086),Canada(cv

=0.082),theEuropeanUnion(cv=0.046),Japan(cv=0.017). Takentogether,worldtotaldomesticuseofcorn

hasacvvalueof0.10sinceMY200102,indicatingrelativelystabletotaldomesticconsumptionofcorninthe

majorcorn

using

countries

of

the

world.

Slightly

higher

annual

variability

in

total

corn

use

in

the

U.S.

can

be

attributedtotherapidexpansionofethanolbasedcornuseinconjunctionwithU.S.environmentalandenergy

policies.

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1987

88

1988

89

1989

90

1990

91

1991

92

1992

93

1993

94

1994

95

1995

96

1996

97

1997

98

1998

99

1999

00

2000

01

2001

02

2002

03

2003

04

2004

05

2005

06

2006

07

2007

08

2008

09

2009

10

2010

11

1,0

00MetricTons

MarketingYear(September1August31)

Chart14.WorldCornTotalUse200809through201011MarketingYears(1,000MetricTons)

RestofWorld

SouthAfrica

Canada

Egypt

Japan

India

Mexico

Brazil

EU27

China

UnitedStates

8/13/2019 Grain Outlook 05-27-10

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Page|12

WorldCornEndingStocks

TotalworldcornendingstocksinMY201011areprojectedtobe154,210,000metrictons. Worldcornending

stockstototaluseisprojectedtobe18.7%inMY201011. SinceMY198788,worldcornendingstockshave

rangedfromalowof110,069,000mtinMY200607toahighof193,883,000mtinMY199900,withaverage

annualtrenddecreasesof1,811,000mtsinceMY198788. AlsosinceMY198788,worldcornendingstocksto

totalusehasrangedfromalowof15.2%inMY200607toahighof43.3%inMY198788,withaverageannual

trenddecreasesinworldcornendingstockstouseof1.0%sinceMY198788. Worldcornendingstocksare

projected

to

have

declined

22%

since

MY

1987

88.

The10largestcountriesaccountedforanaverageof86.3%oftotalworldcornendingstocksovertheMY198788

toMY201011period(Chart16). SinceMY200102,the2largestcountriesintermsofaveragetotalending

stocksofworldcornwereChina(55.6mmt,37%ofallworldcornendingstocks)andtheUnitedStates(44.3mmt,

30%oftotal). Brazil(11.0mmt,7%oftotal),theEuropeanUnion(4.8mmt,3%oftotal),SouthAfrica(3.7mmt)

andMexico(3.0mmt)followedChinaandtheUnitedStatesintermsofamountofcornremaininginending

stocksattheendofeachmarketingyear(Chart17). Clearly,thereisatendencyforworldendingstocksofcornto

beownedbyarelativelysmallnumbersofcountries,suchasChina,theU.S.,BrazilandtheEuropeanUnion.

However,althoughChinaisthelargestholderofworldcornstocks,thatcountrytendstouseitsstockstosupport

domesticusesratherthantomakethemavailabletotheworldcorntrademarket. Thesuppliesofworldcorn

endingstocksthatarelikelytobemadeavailableforworldtradeareevensmallerthattheworldendingstocks

total

(by

at

least

37%,

the

3

year

average

proportion

of

world

corn

ending

stocks

held

by

China).

Amongthetop10Worldcountriesthatholdcornendingstocks,Serbia(cv =1.16),Argentina(cv=0.64),and

Brazil(cv=0.57)havethelargestannualvariabilityincornendingstockslevels,followedbytheEuropeanUnion

(cv=0.38),China(cv=0.31),SouthAfrica(cv=0.27),Canada(cv=0.24),theUnitedStates(cv=0.23),andMexico

(cv=0.23). SouthKoreahasthelowestannualvariabilityincornendingstocksamongthisgroupof(cv=0.18).

Takentogether,totalworldcornendingstockshasacvvalueof0.13sinceMY200102. Thisindicatesthatthe

aggregateannualamountofworldcornendingstocksislessvariableinrelativetermsthanarethelevelsofcorn

endingstocksamongtheworldstop10cornendingstocksholdingnations. Restated,changesinnationsincorn

UnitedStates

276,056

34%

China

155,333

19%

EU27

59,583

7%

Brazil

46,767

6%

Mexico

31,667

4%

India

16,967

2%

Japan

16,433

2%

Egypt11,867

2%

Canada

11,888

2%

SouthAfrica

10,667

1%Other

165,919

21%

Chart15.WorldCornTotalUse:3YearAverageAverageof200809to201011MarketingYears(1,000MetricTons)

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13/14

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Page|14

hadanimpactontheuseofcorninworldmarkets,especiallyintermsoffood,seedandindustrialuse.Potential

expansionofethanolproductionbeyondcurrentlevelsholdscouldmarkedlyaffectworldexportmarkets,given

thattheUnitedStatesisthepredominantsupplieroftheworldscornexports.

Chinasroleinworldcornmarketsinmostyearsisthatofmajor,quasiselfsufficientsuppliertoitsowndomestic

cornuseneeds. However,withastrongdomesticfeedgraindemandbase,productionshortfallsinChinainany

particularyearholdpotentialtomotivatetheChinesetoobtainadditionalneededcornsuppliesviaimport

channels. CurrentChinesebuyingactivityinworldcornexportmarketsisindicativeofthisverysituation

occurringin

MY

2010

11.

Thelongtermtrendtowardlower,tighterworldcornendingstocksandworldcornendingstockstousehas

abatedsomewhatsinceMY200607. Evenwithcurrentreasonableexpectationsforincreasesinworldcornyields

andworldcornproductioninthefuture,anticipatedgrowthintheglobalusageofcornislikelytoextendthelong

termtrendtowardslowerworldcornstocks(ifnotaccelerateit). Inaddition,thefullimpactsofincreasedcorn

usagefromU.S.ethanolproductionunderincreasedethanolblendedfuelinclusionratepoliciesneedstobe

closelyexamined. Allelsebeingequal,increaseduseofcornforethanolintheU.S.wouldlikelycauseeven

sharperpricecompetitioninthefuturebetweenU.S.livestockfeedersandforeignexportbuyerstoobtain

remainingU.S.cornsupplies.Increasedavailabilityofdistillersgrainsfromethanolproductionprocesseswould

helptoabatethistightnessinsuppliesandincreasedpricecompetitiontosomedegree. However,thequestion

ofhowpotentiallylargeincreasesinuseofU.S.cornfordomesticethanolproductionwouldaffectworldcornand

coarsegrain

export

markets

and

the

viability

of

domestic

and

foreign

livestock

enterprises

needs

to

be

closely

examined.

Itispossibletoconceiveofascenariointhefuturewherecornpricesincreasemarkedlyinanefforttoration

limitedcornsuppliestomeetcontinuedgrowthindemandforcornusebothdomesticallyandabroad. Such

potentiallydisproportionalincreasesincornpricesandcropenterpriseincomeprospectsinthefuturecould

causeacceleratedacreageshiftstowardcornproduction(intheUnitedStatesandelsewhere)andawayfrom

otherlessprofitablecropenterprises. Inthissituation,competitivepressureswouldlikelydriveeachcountry

and/orregionswithineachcountrytoproducecropsthattheyhavethegreatestphysicalproductivityand

economicreturnscompetitiveadvantagesin. Inthelongterm,competitivepressuressuchasthisintheUnited

Statesandelsewherewouldlikelyleadtoincreasedcornproductionattheexpenseofothercropenterprises.

Acaveat

to

this

line

of

thought

is

that

it

is

possible

that

per

acre

productivity

of

corn

and

other

crops

may

increase

tosuchadegreethattheseanticipatedcompetitivepressuresonavailableU.S.cornsuppliesmaybelessen(due

togreateravailabilityofcornsuppliesrelativetodemand). Thatsaid,iffuturecornyieldincreasesarelargerona

relativebasisthatforothercompetitivecrops,theincentivetoshiftacreagetowardcornproductionintheU.S.

wouldbeunchanged(ifnotevengreater).