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U.S. Corn Exports Shift Destinations as Brazil Captures China Market

11.03.2024 09:11 "Agro Perspectiva" (Kyiv) — According to the report of the USDA Grain: World Markets and Trade (March 2024), As of February 22, 2024, U.S. shipments and outstanding sales (commitments) of corn have reached 38 million metric tons in 2023/24 (Sep-Aug)1. Record U. S. corn production and large inventories have contributed to a nearly one-third decline in U.S. corn export prices from a year ago, increasing U.S.

competitiveness and supporting forecast exports in 2023/24.

Absent from the list of renewed buyers is China. Since May 2022, a new phytosanitary agreement has enabled corn trade between Brazil and China, increasing competition in China later in the year2. To-date commitments of U.S. corn stand at just 1.7 million tons, 3.0 million less than in 2022/23 and a fraction of the 17.0 million tons China at the same point in 2020/21. This sharp drop is mostly due Brazil’s bumper 2023 safrinha3 corn crop, which made Brazil supplies extremely competitive at the start of the current U.S. marketing year.

From August 2023 through January 2024, Brazil exported 45.2 million tons of corn, with China accounting for one third of the total. Per China Customs data, Brazil corn accounted for nearly 85 percent of imports between September and December 2023. While lower global corn prices are limiting expansion in 2024 safrinha crop plantings, Brazil’s marketing year (Mar-Feb) exports remain forecast at 52.0 million tons, posing competition for U.S. corn trade in 2024/25.

Higher Brazil shipments to China have reduced supplies available to other buyers, presenting new opportunities for U.S. exporters to backfill markets supplied by Brazil last year, while also enabling U.S. trade to further support record demand in Mexico.

Mexico has been a top buyer of U.S. corn for many years. In 2023/24 (Oct-Sep), Mexico imports are forecast at a record 20.6 million tons. Surging consumer demand for livestock products continues to support feed demand in Mexico. An ongoing drought and reduction in water available for irrigated

winter corn has also hindered Mexico’s domestic corn supplies, further fueling imports. Corn inspected for export to Mexico totals 9.4 million tons this marketing year, 3.1 million tons higher than in 2022/23and 38 percent higher than the 5-year average 4. By law, truck and rail shipments are not required to be inspected5.

In Colombia, renewed U.S. supplies and the advantage of duty-free access along with weaker 2022/23 Argentina exports have caused volumes to rebound. Between October through December 2023, Colombia imported around 90 percent of supplies from the United States versus 70 percent from Brazil in October-December 2022. U.S. market share plummeted in 2022/23 amid high prices and preferential access granted to Brazil under the Andean Price Band system.

Commitments in long-standing East Asia markets including Japan, South Korea, and Taiwan have also recovered year to year. Lower corn prices in 2023/24 have offset the higher cost of moving corn for shipment out of ports in the Pacific Northwest. These ports offer faster shipping times than those in

Argentina or Brazil, preserving quality characteristics and reducing delays for these entirely import dependent markets.

Some headwinds are still present for U.S. exporters through the remainder of the year. After facing a significant drought in 2022/23 (Mar-Feb), Argentina exports are forecast to rebound and increase competition for the United States in the coming months.

U.S. corn exports are forecast at 53.3 million tons for marketing year 2023/24 (Sep-Aug) and 54.0 million for trade year 2023/24 (Oct-Sep), unchanged from last month’s forecast.

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11.03.2024

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