Less maize 2022/23: how is consumption adjusting?

The lower supply for the new cycle is being felt in the market. In March, only 2.1 Mil MT were shipped, marking the worst season kick-off in 6 years. Meanwhile, feed demand is trying to adjust to the new context at the expense of costs.

Estimated maize production, according to the new monthly publication of GEA-BCR, has been cut by 3 Mil MT to 32 Mil MT, thus yielding the lowest volume since 2017/18. With an estimated initial stock of 6.3 Mil MT, the total supply of grain in the campaign reaches 38.3 Mil MT, 30% below the total grain available in the previous cycle. This lower availability of corn in the domestic market makes for a complex scenario regarding maize use in the current season.

On the domestic consumption side, industrial use remains stable between seasons, with 4.4 Mil MT destined for dry and wet milling, ethanol production and other industries. However, an increase in use for animal feed is expected, which is mainly due to the effects of the drought on the supply of fodder.

The lack of rainfall strongly affected the supply of pasture and other fodder, which means that the consumption of maize for animal feed should be higher in order to compensate for this shortage. In fact, according to some dairy farmers in the main production zone, cracked maize for feed this season has very little grain, basically offering only a source of fiber, but not a source of energy. This means that it will be necessary to supplement it with whole maize or balanced feed, thus domestic maize consumption is estimated at 15.2 Mil MT, which implies an increase of 1.7 Mil MT compared to the previous season.

Against this backdrop of lower grain availability and higher domestic consumption, exports are projected to reach 20 Mil MT, which is a cut of almost 45% compared to last year’s exports.

In fact, this reduction can already be seen in the first export indicators for the season. According to data from some shipping agencies, maize shipments from Argentine ports during the first month of the season totaled 2.1 Mil MT, the lowest volume since the 2016/17 season for the same period.

Lastly, this sharp cut in estimated exports for the season is also in line with the behavior observed in export permits (DJVE). To date, exports have been declared for 11.2 Mil MT, less than half of what had been sold abroad at the same date of the last campaign (22.9 Mil MT) and well below the Equilibrium Export Volume established by the SAGyP of 20 Mil MT.

Source: https://bcr.com.ar/

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