Australian maize industry overview - 2012

Tony Cogswell

Lachlan Commodities

Keywords: maize, markets

Take home messages

Industry background

• Average Australian maize production: 440kmt p.a.
• Largest production year: 520kmt in 2007-08 season
• Australia’s current GMO status: 100% non GMO
• Annual maize exports: 6-7% of production
• East coast of Australia produced >200kmt in 1894

2010-11 Breakdown of the Australian maize market

• Stockfeed:                           196kmt
• Dry Milling:                         130kmt
• Wet Milling:                        45kmt
• Export:                                                  27kmt
• Confectionary:           27kmt

Total Production:             425kmt

Grain industry comparison

Japanese Market Overview

Population: 127,000,000

Annual maize Imports: 16,000,000mt

Potential interest In Australian corn: 2,070,000

Feed = 12,000,000; GM Wet Milling = 1,900,000; GM Free Wet Milling = 1,900,000; GM Dry Milling = 0 and GM Free Dry Milling = 170,000

Korean Market Overview

Population: 49,000,000

Annual maize imports: 9,000,000mt

Potential interest In Australian corn: 1,400,000

Feed = 6,400,000; GM Wet Milling = 1,200,000; GM Free Wet Milling =1,300,000; GM Dry Milling = 0 and GM Free Dry Milling = 100,000

Combined Japanese and Korean Market Overview

Population: 176,000,000

Annual maize imports: 25,000,000mt

Potential interest In Australian corn: 3,470,000

Feed = 18,400,000; GM Wet Milling = 3,100,000; GM Free Wet Milling = 3,200,000; GM Dry Milling = 0 and GM Free Dry Milling = 270,000

A Changing Environment

• In 1995 China was producing about 14mmt of soybean and consuming all of their production.
• In 2010 China is still only producing 14mmt of soybean annually but consuming 69mmt.
• China’s working age population will peak in the next two years
• China’s overall population is estimated to peak in 2025 at 2.4 billion
• USA production in 2005 was around 500mmt of corn
• USA  corn production in 2011 was 376mmt
• USDA estimated corn production for  2012  is 330mmt
• USA ethanol production in 2010 was consuming about 30% of the national corn crop
• Strong government support in Central America to increase soybean and corn production
• @ USD$7.00 per bushel or AUD$270 per m/t ethanol production is uneconomic resulting in a year on year reduction in ethanol demand
• Current discussion in US on reducing the current  ethanol mandate in auto-fuel
• Eastern Europe(Hungary)  now exporting bulk corn to Asia
• 2012 World supply for corn -44.7mmt
• 2012 World demand for corn -22.8mmt
• 2012 World wheat supply -6.7mmt
• 2012 World wheat demand -1.8mmt
• Australian domestic demand for corn also reduced

Port of Brisbane Maize Exports

Spot CBOT Corn to Wheat Spread

3 Month CBOT Corn to Wheat Spread

Futures converted to AUD values

Contact details

Tony Cogswell

Lachlan Commodities

tony@lachlancommodities.com