Brazil beats US in corn exports in June

US corn exports fell in June compared to Brazil and are unlikely to have done better in July, as high prices and foreign competition continue to stifle the export business of the world’s largest corn supplier.

Meanwhile, US soybean exports have hit a record for the month as companies seek to meet the large pending sales to China.

According to data published last Friday (08/02) by the US Census Bureau, the United States exported 3.07m tons of corn in June, the lowest June volume in six years and the lowest in any month since November 2017.

Despite the lackluster US shipments, the world is still getting its corn thanks to competitors in South America. Brazil, the second-largest exporter, shipped 6.3m tons of the grain in July, a record volume for any month.

According to USDA estimates, Brazil, Argentina, and Ukraine combined will export 99.5m tons of maize in 2018-19, about 52% more than last year. The previous record for the top three maize suppliers is 78.9m tons in 2016-17.

The United States exported 3.19m tons of soybeans in June, surpassing last year’s record of 3.12m. Between September and June, shipments totaled 38.95m tons (1.4bn bushels), down 24% on the year.

Exports to China reached 1.73m tons in June, about 54% of total exports in the month. This was China’s largest monthly share of US soybean exports and the first time it has exceeded 50% since January 2018.

Shipments to destinations other than China totaled 1.47m tons, substantially below the previous year, but above recent June averages, suggesting that soybean deals with other countries are occurring as usual.

The USDA expects US soybean exports to reach 46.3m tons (1.7bn bushels), which means an average of 3.66m tons is expected to leave US ports in July and August. Inspection data indicates that July shipments exceeded this mark, but the weekly pace is expected to reach nearly 750,000 tons per week from now until August 31, to match USDA prospects.

The following DataLiner graph shows corn exports trends of Brazil per quarter, beginning from the Q1 2014:

This fact depends largely on the fulfillment of Chinese sales. Total commitments for soybeans in 2018-19 stood at 48.7m tons on 25 July, meaning there is some leeway, but not if China suddenly cancels orders.

But US-China trade relations have soured since US President Donald Trump promised to put tariffs on more Chinese products from September, partly motivated by his claim that China has failed to deliver on its promises to buy large volumes of American agricultural products.

On Tuesday (08/06) morning in Beijing, the Chinese Ministry of Commerce announced that Chinese companies had stopped buying US agricultural products and that China could impose import tariffs on products that were bought after August 3rd.

Apparently, China still planned to honor previous US soybean import contracts, which would be shipped mainly this month and next month. The trade dispute also seriously threatens the US soybean export campaign in 2019-20 if its biggest buyer plans to avoid US oilseed.

Source: Reuters

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