The US Department of Agriculture has again lowered its estimate for global maize and soybean production in 2023, highlighting the impact of the devastating drought affecting Argentina.
The latest monthly crop report from the US government predicts that maize production in Argentina will come in at 37 million tons in 2023. The department had already trimmed its estimate back in March by seven million tons.
"There are almost no surprises in this report. Argentina's corn and soybean production forecast came in a little lower than expected, but remained within the forecast range," said Dewey Strickler of Ag Watch Market Advisors.
The USDA's "Wasde" report cut projections for global corn production by three million tonnes. The drop is due to not just the challenges facing Argentina, but also difficulties in Europe. Russian production should offset some of the declines, said the US Department of Agriculture.
"For Argentina, production is reduced because continued hot weather in March has reduced yield prospects for late-sown maize, although local rains were beneficial last month," the Wasde report said.
Russian maize production, meanwhile, is set to rise by almost two million tonnes compared to the previous year, hitting 15.83 million tonnes in 2023.
The gloabl estimate for maize stocks was lowered by a smaller amount to 295.35 million tons, down one million tons from March.
For soybeans, the impact of the Argentine drought is even more pronounced.
The global production estimate has been reduced by 5.5 million tonnes to 369.64 million tonnes, mainly due to a lower harvest in Argentina, where production will fall to 27 million tons from the previous forecast of 33 million tons.
Brazil's production will compensate to some extent for these losses, said the Department, rising by one million tonnes to 154 million tonnes.
The report offered little change to previous wheat forecasts, with global production estimated to be 789 million tonnes. Production in Argentina and Europe is marginally down on last year.
In a small surprise, world consumption of the grain is forecast to rise by 2.9 million tonnes to 796 million tonnes, which has caused "world stocks to weaken a little more than expected," said Dewey Strickler.