US corn exporters must pick up pace to approach USDA projections

US corn exporters will have to significantly boost the pace of shipments if they have any hope of meeting government projections for the 2022-23 marketing year due to transportation bottlenecks late last year and vigorous competition from Brazilian growers.

The US Department of Agriculture (USDA) trimmed export projections by 150 million bushels (3.8 million tonnes) to 1.925 billion bushels (48.9 million tonnes) in the January edition of the influential World Agricultural Supply and Demand Estimates (Wasde).

“The corn export pace is starting to normalize. The USDA US export numbers are still a bit high, and I would expect them to be revised downward in future reports. I would expect a pretty normal pattern for U.S. corn exports going forward, providing any unforeseen weather issues,” Jay O’Neil, owner of HJ O’Neil Commodity Consulting, said in an interview.

A tremendous year-on-year deficit in US exports will make reaching even these revised projections a hard slog, market participants said.

The US has exported 12.61 million tonnes of corn in the first five months of the 2022-23 marketing year, down 36% from 19.57 million tonnes at this point last year, weekly data from the USDA showed.

The volume of corn going from Iowa, Illinois, and other growing states to export terminals near New Orleans tumbled in the second half of 2022 because of low water levels in the Mississippi River.

“October-November-December was the US season for being most competitive, but not enough barges made it down the river to feed the vessels. When that situation occurs, you lose that business, and you won’t get it back,” O’Neil said.

Competing with the Brazilian corn market

US corn exporters are facing increasing competition from Brazil, which is expected to ship a record 47 million tonnes to overseas customers during the 2022-23 market year, according to a report from the USDA’s local attaché office in Brazil on Tuesday and the January Wasde.

Watch our video on global corn export trends

Brazil signed an export protocol with China in mid-2022, which allowed volumes to flow starting in November, but it was enough to place the Asian country as the 11th biggest importer for the year with around 1.2 million tonnes shipped.

Some analysts believe China could import as much as 18 million tonnes of corn from the South American country in 2023, “which would severely impact trade with the United States,” according to the attaché report.

Mexico has been a good customer of US corn because of a drought, and Japan has continued to make robust purchases, but “China not so much, as they are taking Brazil corn,” senior grain and oilseed commodity analyst at Futures International Terry Reilly told Fastmarkets Agriculture.

“Export grain elevations have squeezed a bit by challenging logistical conditions, but they should improve slightly with improved weather as we head into Spring. Competition from the South American harvests however will require U.S. exporters to remain aggressive,” O’Neil said.

For more information on the current corn market, take a look at our dedicated page for corn market insights.