4 days ago
Bumper Brazilian corn crop could spoil US exporters' fun: Braun
NAPERVILLE, Illinois, June 5 (Reuters) - If anything can wreck the party for U.S. corn exporters, it's Brazil.
The U.S. Department of Agriculture has sky-high goals for U.S. corn exports in both the current and upcoming marketing years, but the overall potential may be confined by Brazil's current harvest success.
As of May 29, U.S. corn exporters had sold 99% of USDA's full-year export outlook for 2024-25, which ends August 31. That is the fullest coverage by this point in a decade, and the figure would generally indicate that the current export target is too low.
But by how much?
U.S. corn has recently been able to maintain competitive pricing versus Brazil, and 2024-25 U.S. export sales over the last several weeks have been safely above average. However, Brazil just began harvesting its heavily exported second corn crop, and some production estimates have risen notably over the last week or so.
Ever since Brazil's second corn output – and exports – exploded in 2011-12, U.S. exporters' ability to make corn sales in the final quarter of the marketing year has been somewhat limited whenever Brazil's crop is strong.
Conab's May estimates showed Brazil's 2024-25 second-corn harvest up 11% from last year. Similar past years might imply that the next three months could feature an additional couple million metric tons of U.S. corn sales for 2024-25.
USDA pegs 2024-25 U.S. exports at 66 million tons, second to the 69.8 million shipped in 2020-21 when China was a major player. The platform for 2024-25's success started building in the prior year, which boasted a record U.S. corn harvest.
But the urge to compare this year with last year should come with extra caveats. Not only was corn cheap and plentiful a year ago, but Brazil's second crop shrank 12% on the year, facilitating above-average sales at the tail end of the 2023-24 U.S. season.
Some analysts have surmised that tariff fears caused U.S. corn customers to stock up early on purchases, which cannot be confirmed or denied but could be another possible short-term limitation on U.S. corn sales.
USDA's aspirations for U.S. corn exports in 2025-26 are even bigger than in 2024-25, but the feasibility is unclear given that the big 2024-25 Brazilian crop will be hogging global business through the next several months.
As of May 29, U.S. exporters had sold just over 3 million tons of corn for export in 2025-26, slightly more than in the last two years but nothing special.
Like old-crop sales, new-crop U.S. corn sales are also limited just prior to the start of the marketing year whenever Brazil's second-corn output is solidly up on the year. This can be extended to the other corn exporters, too.
Combined 2024-25 corn output in Brazil, Argentina and Ukraine is set to rise 2% on the year, which could keep a lid on 2025-26 U.S. corn sales over the next three months.
Apart from Brazil, U.S. exporters' potential success in 2025-26 depends on what happens at home. Although things are not perfect, the 2025-26 U.S. corn crop is off to a promising start with mostly benign weather expected for the first half of June.
Over the last two decades, U.S. corn exports have almost never disappointed from initial expectations whenever production meets or exceeds the initial expectations.
This offers a chance for U.S. exporters to retain control of their destiny despite ample Brazilian offerings if they can get cooperation from one very finicky source: Mother Nature.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
