US corn could struggle to compete in export market

: Agriculture
23/06/23

US corn has lacked competitiveness so far in 2022-23, but has found steady demand in Mexico. The origin could struggle in 2023-24 in the face of reduced Chinese demand, particularly if weather conditions do not improve in the US corn belt.

Deteriorated export prospects to China

Dry conditions in the US corn belt could leave final output well below previous expectations if sufficient rainfall fails to materialise in the coming weeks, which would in turn constrain the origin's export prospects in 2023-24 and reduce its ability to compete with ample supplies in Brazil in the first part of the marketing year.

For the remainder of 2022-23, US corn exports in May-August could stand at 16.3mn t, assuming the US exports 37pc of its crop in those months, in line with the 10-year average. But China, one of the major recipients of US corn in the past few years, is due to import less corn than previously expected for the rest of 2022-23 and in 2023-24 largely because of increased feed wheat production domestically. Much of the remaining demand is likely to be picked up by Brazil because of the country's record corn crop and competitive prices.

That said, the US may have a short window of opportunity as Brazil struggles with logistics, with corn competing with soybeans and other commodities for internal shipping capacity to ports. The 2022-23 soybean exports are also still ongoing and are for now taking up much of the country's export capacity.

But Brazil's logistical constraints may not be enough to make substantial room for US corn exports to China. In 2022-23, before Brazil's record crop had hit the market, China had already cancelled over 1.5mn t of previously booked volumes, with over half a million tonnes cancelled in the week ending 8 June.

Mexico offers some hope

In contrast to China's reduced purchases, Mexico's receipts for US corn have been steady on the year and imports for 2023-24 are due to increase to 18mn t, from 17.2mn t estimated for 2022-23, according to the US Department of Agriculture's Foreign Agricultural Service (USDA FAS).

Mexico partially lifted its ban on genetically modified (GM) corn earlier this year, which helped preserve the trade flow, but still bans its use for human consumption.

That said, if Brazilian corn widens its discount to US corn sufficiently in the coming months, it could gain market share in traditional US importing destinations.

By Anna Sneidermane

US corn exports mn t

Mexico's corn imports mn t

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

25/04/07

Flooding on US rivers mires barge transit

Houston, 7 April (Argus) — Barge transit slowed across the Arkansas, Ohio and lower Mississippi rivers over the weekend because of flooding, which prompted the US Army Corps of Engineers (Corps) to close locks and issue transit restrictions along the waterways. The Corps advised all small craft to limit or halt transit on the McClellan-Kerr Arkansas River Navigation System (MCKARNS) in Arkansas because flows reached above 200,000 cubic feet per second (cfs), nearly three times the high-water flow. The heavy flow is expected to persist throughout the week, posing risks to those transiting the river system, said the Corps. Some barges have halted movement on the river, temporarily miring fertilizer resupply efforts in Arkansas and Oklahoma in the middle of the urea application season. The Corps forecasts high flows to continue into Friday, and the National Weather Service predicts several locations along the MCKARNS will maintain a moderate to minor flood stage into Friday as well. Both the Arthur V Ormond Lock and the Toad Suck Ferry Lock, upriver from Little Rock, Arkansas, shut on 6 April because of the high flows. Flows along the Little Rock Corps district reached 271,600cfs on 7 April. The Corps forecasts high flows to continue into Friday. Ohio and lower Mississippi rivers The Corps restricted barge transit between Cincinnati, Ohio, and Cairo, Illinois, on the Ohio River to mitigate barge transportation risks, with the Corps closing two locks on the Ohio River on 6 April and potentially four more in the coming days. Major barge carrier American Commercial Barge Line (ACBL) anticipates dock and fleeting operations will be suspended at certain locations along the Mississippi and Ohio rivers as a result of the flooding. NWS forecasters anticipate major flooding levels to persist through the following week. Barge carriers also expect a backlog of up to two weeks in the region. To alleviate flooding at Cairo, Illinois, where the Ohio and Mississippi Rivers meet, the Corps increased water releases at the Barkley Dam on the Cumberland River and the Kentucky Dam on the Tennessee River. The Markland Lock, downriver from Cincinnati, Ohio, and the Newburgh lock near Owensboro, Kentucky, closed on 6 April. The Corps expects the full closure to remain until each location reaches its crest of nearly 57ft, which could occur on 8 or 9 April, according to the National Weather Service (NWS). Around 50 vessels or more are waiting to transit each lock, according to the Lock Status Report published by the Corps on 7 April. The Corps also shut a chamber at both Cannelton and McAlpine locks. The John T Myers and Smithland locks may close on 7 April as well, the Corps said. The Olmsted Lock, the final lock before the Ohio and Mississippi rivers, will require a 3mph limit for any traffic passing through. The NWS expects roughly 10-15 inches of precipitation fell along the Ohio and Mississippi River valleys earlier this month, inducing severe flooding across the Ohio and Mississippi River valleys. A preliminary estimate from AccuWeather stated an estimated loss of $80-90bn in damages from the extreme flooding. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariffs and their impact larger than expected: Powell

25/04/04

Tariffs and their impact larger than expected: Powell

New York, 4 April (Argus) — Federal Reserve chairman Jerome Powell said today tariff increases unveiled by US president Donald Trump will be "significantly larger" than expected, as will the expected economic fallout. "The same is likely to be true of the economic effects, which will include higher inflation and slower growth," Powell said today at the Society for Advancing Business Editing and Writing's annual conference in Arlington, Virginia. The central bank will continue to carefully monitor incoming data to assess the outlook and the balance of risks, he said. "We're well positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell added. "It is too soon to say what will be the appropriate path for monetary policy." As of 1pm ET today, Fed funds futures markets are pricing in 29pc odds of a quarter point cut by the Federal Reserve at its next meeting in May and 99pc odds of at least a quarter point rate cut in June. Earlier in the day the June odds were at 100pc. The Fed chairman spoke after trillions of dollars in value were wiped off stock markets around the world and crude prices plummeted following Trump's rollout of across-the-board tariffs earlier in the week. Just before his appearance, Trump pressed Powell in a post on his social media platform to "STOP PLAYING POLITICS!" and cut interest rates without delay. A closely-watched government report showed the US added a greater-than-expected 228,000 jobs in March , showing hiring was picking up last month. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New tariffs could upend US tallow imports

25/04/03

New tariffs could upend US tallow imports

New York, 3 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a collection of charges amounting to a possible 69.5pc tax on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Diamond Green Diesel operates Gulf Coast biorefineries in foreign-trade zones, which allow companies to avoid tariffs on foreign inputs for products that are ultimately exported. Biofuel producers in these zones could theoretically refine foreign tallow, claim a 45Z subsidy, and avoid feedstock tariffs as long as they ship the fuel abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Funding cuts could delay US river lock renovations

25/04/03

Funding cuts could delay US river lock renovations

Houston, 3 April (Argus) — The US Army Corps of Engineers (Corps) will have to choose between various lock reconstruction and waterway projects for its annual construction plan after its funding was cut earlier this year. Last year Congress allowed the Corps to use $800mn from unspent infrastructure funds for other waterways projects. But when Congress passed a continuing resolutions for this year's budget they effectively removed that $800mn from what was a $2.6bn annual budget for lock reconstruction and waterways projects. This means a construction plan that must be sent to Congress by 14 May can only include $1.8bn in spending. No specific projects were allocated funding by Congress, allowing the Corps the final say on what projects it pursues under the new budget. River industry trade group Waterways Council said its top priority is for the Corps to provide a combined $205mn for work at the Montgomery lock in Pennsylvania on the Ohio River and Chickamauga lock in Tennesee on the Tennessee River since they are the nearest to completion and could become more expensive if further delayed. There are seven active navigation construction projects expected to take precedent, including the following: the Chickamauga and Kentucky Locks on the Tennessee River; Locks 2-4 on the Monongahela River; the Three Rivers project on the Arkansas River; the LaGrange Lock and Lock 25 on the Illinois River; and the Montgomery Lock on the Ohio River. There are three other locks in Texas, Pennsylvania and Illinois that are in the active design phase (see map) . By Meghan Yoyotte Corps active construction projects 2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ags prices caught up in tariff fallout

25/04/03

Ags prices caught up in tariff fallout

Paris, 3 April (Argus) — Grain and oilseed traders were buffeted by volatile futures markets and exchange rates on Wednesday. But the full impact of the tariffs imposed by the US — a major net exporter of wheat, corn and soy — is only likely to emerge once other governments' responses become clear. Wheat, corn and soybean futures were trading lower on the day when the Chicago Board of Trade opened on 3 April, the day after the US announced a swathe of import tariffs . But corn and wheat futures contracts began to recover hours later. Canada and Mexico, which made headlines in the initial wave of tariffs from Trump's administration, were on the sidelines on 2 April. Both are covered by the United States-Mexico-Canada Agreement (USMCA). This means Mexico could remain an important outlet for US corn and wheat — for now. US corn sellers have relied heavily on Mexico to shore up sales this marketing year. Of the 54mn t of current-crop US corn sold for export this marketing year (September-August) as of 27 March, 19mn t has been for Mexico, US Department of Agriculture (USDA) data show. USDA sees US corn exports hitting 62mn t this marketing year. Impact on Europe and Asia Euronext wheat, corn and rapeseed futures also began trading down on the day. But a sharp fall in the value of the dollar against the euro meant bids and offers for EU wheat discussed in the physical market in dollar terms held more or less steady early today. The Interactive Data Corp exchange rate closed at €0.90630 to the dollar at midday in London on 3 April — the lowest since October 2024. Ukrainian corn sellers are under particular pressure from a drop in the price of US commodities on certain markets, but could also stand to gain from a halt in deliveries of US corn to importers in Asia, before Brazil begins shipping its safrinha crop in July. Ukrainian corn typically competes with the US in Mediterranean markets, notably Spain, and in China. But Ukrainian corn has not been competitive against US corn recently — in the month since 3 March , when the US doubled tariffs on China from the 10pc introduced on 4 February, Ukrainian corn fob prices' premium to US corn fob Gulf has climbed, and in late March it hit its highest in Ukraine's current October-September marketing year, Argus -assessed prices show. But there is no guarantee that buyers will pay up, at least not immediately. Chinese buyers have already distanced themselves from US corn and soybeans this marketing year. Chinese buyers took little notice of Ukrainian corn sellers floating offers at above $270/t cif China on 2 April, immediately after the US announced an additional 34pc tariff on imports from China — bringing the actual rate to 54pc — and Beijing vowed retaliation . Chinese importers bid for Ukrainian corn in the $250s/t cif for July-August loading last week . Chinese buyers could be exposed to hikes in Brazilian soybean prices — something that might be more likely if EU buyers book more soybeans from Brazil at the expense of US cargoes. US soybean sales to China have already begun to slow. Chinese crushers have avoided US soybeans since December because of uncertainty over trade relations. Shipments to China dominated US vessel line-ups in late March, with exporters sending 641,000t to China on 21-27 March alone. Some 600,000t of corn was sold but not yet shipped as of 27 March, compared with 1.6mn t still to ship at the same point last month, weekly USDA data show. By Claudia Jackson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more