Reports CTRM for Agricultural and Soft Commodities

CTRM for Ags & Softs redirected much of the trade in feed corn to the Asia Pacific region, including Japan, South Korea, Taiwan and many of the emerging economies in the region. Developing countries worldwide have continued to increase corn imports fairly steadily since 1980. This growth in developingcountry imports has propelled global corn trade above 70 million metric tons each year since 1999/2000. Projections for U.S. corn exports are in USDA's Agricultural Baseline Projections, which provides 10-year projections for the U.S. and world agricultural sector for selected commodities. Japan is the world's largest corn importer by far. While producing almost no coarse grains, Japan is a very large meat producer, so the country is a steady buyer of corn, with attention to quality. In recent years, Japanese imports of corn for livestock feed have stagnated, while imports for industrial use and starch manufacturing have increased. South Korea is the second-largest importer of corn in the world. South Korea is a price-conscious buyer, willing to switch to feed wheat or other coarse grains, and ready to buy corn from the cheapest source. Mexico is a growing importer. While a large corn producer, Mexico processes much of its production of white corn into human food products, but has turned to imported yellow corn and sorghum for livestock feed to support increased meat production. Corn Trading Corn is traded o n the Chicago Mercantile Exchange (CME) Group, the Brazilian Mercantile and Futures Exchange (BM&F), the Mercado a Termino de Buenos Aires (MATba), the Dalian Commodity Exchange (DCE), the Kansai Commodities Exchange (KANEX), the National Commodity and Derivatives Exchange (NCDEX) and the Tokyo Grain Exchange (TGE). Corn prices are influenced by a number of factors, mostly related to developments in the US markets:  To fulfill biofuel needs in the U.S., a new form of corn has been introduced. Called tropical maize, this corn variety requires little nitrogen, unlike standard sweet corn, and stores 25% more sugar in the stalk because it does not produce any ears of corn. Tropical maize also has a short gestation period and can be easily rotated with standard corn or soybean crops without depleting the soil.  Over half of the planted corn has been genetically modified to be more resistant to disease and herbicides.  The United States Department of Agriculture (USDA) produces several important reports on corn. Every year in the second half of March, it’sProspective Plantings report is released, which details how much and which crops farmers will plant for the upcoming season. Every month thereafter, its Monthly Crop Production report estimates the supply and demand for soybeans. The Grain Stocksreport is published four times a year and examines the supply of soybeans and various other grains on a state-by-state basis and looks at whether the soybeans are offsite or onsite.  The North American Free Trade Agreement (NAFTA) added corn as one of its freely traded products, wreaking havoc on the Mexican economy because of the disparity between subsidies and farming sophistication. Types of Entities Involved in Corn Trading    Producers/growers Agents Brokers    Banks Insurers Traders and Merchants © Commodity Technology Advisory LLC, 2016, All Right Reserved  Inspectors  Exporters/Importers 45

Reports CTRM for Agricultural and Soft Commodities | Page 46