WASHINGTON: U.S. corn export sales plunged to a more than three-year low last week, according to U.S. government data released on Friday, as rising competition from massive harvests in Brazil and Argentina blunted demand from the world’s top exporter. The sales slump came even as corn prices dropped to a seven-week low in the reporting period, suggesting global buyers feel little urgency to lock in import purchases amid record-large global supplies, traders and analysts said.
Importers booked a net 140,275 tonnes of the grain for shipment by the end of August in the week ending June 29, the lowest yet for the 2016-17 marketing year, the U.S. Department of Agriculture said. Combined sales, including 74,516 tonnes booked for shipment in the upcoming marketing year, were the lowest since June 2014, according to USDA data. “Brazil is starting to steal some business from the U.S.,” said Terry Reilly, senior commodities analyst with Futures International. “It all goes back to the record safrinha crop,” he said, referring to the country’s second corn harvest which was Brazil’s largest on record this year. Corn exports from Brazil, the world’s No. 2 supplier, jumped to 563,206 tonnes in June, up from 309,986 tonnes in May and 19,266 tonnes in June 2016, Brazil’s Trade Ministry said this week. Meanwhile, a flood of Argentine corn is poised to enter the marketplace this month as late planting and wet weather delayed the harvest.
Spot corn shipments from Brazil’s Paranagua port are priced around $163.60 per tonne on a free-on-board basis, compared with U.S. Gulf spot shipments around $161.50 per tonne, according to Reuters data. “South America is starting to get their corn boats lined up now. It’s going to be a battle from here on out because they’ve got so much grain to move down there,” said a U.S. corn export trader who asked not to be named because he is not authorized to speak to media. The USDA is due to update its global supply and demand estimates next Wednesday and some analysts are expecting the agency to trim its U.S. corn export forecast given the heightened competition from Brazil and Argentina.The USDA is expected to increase world corn ending stocks to a record 225.72 million tonnes, up 1.13 million from its June estimate, according to analysts polled by Reuters.