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U.S. Corn Exports Face Competition From Brazil, Argentina
USAgNet - 04/25/2019

Corn exports from the United States are facing increased competition from Brazil and Argentina, the two South American nations that are offering cargoes at competitive prices on the back of high crop output, a trend that could put downward pressure on Chicago corn prices in coming months, analysts said.

The changing trend should potentially see corn exports from Brazil and Argentina making double-digit gains in the 2018-19 marketing year, while the U.S. corn exports will drop marginally, as buyers in South Korea, Taiwan, Japan, China, Egypt, and other traditional destinations of the U.S. cargoes queue up for more attractively-priced South American offers.

Corn production in Brazil and Argentina in 2018-19 is forecast to be 17.1% higher at 96 million mt, and 47% higher to 47 million mt, respectively, from the year ago levels, according to the April World Agricultural Supply and Demand Estimates, WASDE, report by the US Department of Agriculture.

Exports from Brazil are seen rising 23% to 31 million mt in the current year, whereas Argentina is likely to export 30.5 million mt of corn, 45.2% higher than last year, USDA said in the report.

The U.S., however, is likely to see a 1.3% year on year drop in its corn production to 366.3 million mt, and a 5.7% drop in its exports at 58.4 million mt, the USDA data showed.

Export prices for corn from Brazil and Argentina are at relatively lower levels since February due to higher availability, whereas export prices for the US corn remain elevated because of concerns over planting delays caused by flooding in the Midwestern corn belt, the USDA said in its April grain report.

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