There should be more appreciation of the phenomenal run on corn exports this season, but the lingering question is whether the surprising growth of export demand is a product of corn prices having been previously undervalued. Record corn exports again coincide with a period of doubt about Chinese demand for U.S. crops. The last time corn exports were close to this strong was 2020/2021, which not only marked the last major crop price lows, but also the last time there were debates about a new U.S.-China trade deal.
Here are the key export totals so far for the marketing year: corn export sales reached above 2.3 billion bushels this week to stand 31% above a year ago, which compares to the USDA target of a 12% increase. Soybean export sales are up to 1.26 billion bushels for a decline of 20% from last year, versus USDA projecting a drop of 16%. Wheat sales are 800 million bushels for growth of 12% versus USDA calling for an increase of 9%.
The leading buyer of U.S. corn is by far Mexico, accounting for about one-third of cumulative sales this year. Mexican corn demand is on the upswing again this year despite recent improvement for drought conditions, with part of the offset coming from having more cattle to feed because of screwworm restrictions. Other top corn buyers include Japan, Columbia, Spain and South Korea. The latter two are notable for being associated with tariff tensions again recently.
China is back as the top customer of U.S. soybean exports, having made up about 29% of cumulative sales since September. China’s business is still a little less than half of what it was last year. Adding in the potential new Chinese purchase promises touted by President Donald Trump, the timing of follow-through now matters for whether other U.S. soybean buyers are crowded out of the market. One possibility is that China stays busy pricing earlier U.S. soybean purchases while otherwise still shifting new business into Brazil over the next two months before President Trump and Xi Jinping meet again to discuss a trade deal.
It is no surprise that Mexico is the second leading buyer of U.S. soybeans, but lesser known is the substantial demand from Egypt. Soybean sales to Egypt have represented almost 10% of total export demand. Pakistan is a more notable player this year, having committed to buying just more than 1 million metric tons, or over five times their volume from last year.
Higher Russian wheat values have been a driver of better competitiveness for the U.S. market. Recent weakness for the dollar was another input for improving interest in U.S. wheat. China has a small amount of U.S. wheat on the books. Mexico is again at the top of the list for U.S. wheat purchases along with the usual trading partners, Japan, Taiwan, South Korea and Columbia.
Source: https://www.farmweeknow.com/