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USDA Grains: World Markets and Trade

11 April 2013

USDA Grains: World Markets and Trade - April 2013USDA Grains: World Markets and Trade - April 2013

Since 2009/10, declining US corn exports have been replaced by just three competitors. Over the same time period, there has been only a small boost in world corn trade.
USDA Grains: World Markets and Trade Reports

Competitors Replace U.S. Corn Exports

In past major U.S. production shortfalls (1988/89 and 1995/96), large stocks limited price gains and buffered U.S. exports, thereby reducing incentives for other countries to expand production. In recent years, however, high U.S. prices resulting from strong domestic demand and low stocks have stimulated competitor production. Record supplies in Argentina, Brazil, and Ukraine (combined) coincided with the U.S. drought in 2012, resulting in Brazil becoming the world’s largest corn exporter.

The March 28 Grain Stocks report showed higher-than-expected stocks and caught the industry by surprise. U.S. export prices have subsequently plunged about $40 per ton ($1.00 per bushel). However, the United States is still uncompetitive and it remains to be seen whether these falling prices boost U.S. export sales near-term. Argentina and Brazil are in the midst of harvesting record crops and therefore prices are likely to be pressured further.

Looking to 2013/14, there are expectations for record U.S. plantings and a record crop. This would likely depress prices and ultimately impact planting decisions for Argentina and Brazil 6 months from now.

April 2013

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