International market focuses on planting intentions for the 2025 US corn crop

The tariffs imposed by China on the US market, on corn, have not had any direct influence on US exports so far. There were concerns about Mexico, as it is one of the largest buyers of corn from this origin, however, the neighboring country is adapting to the requested adjustments and does not pose a risk to US corn exports. So, weekly sales in the United States remain strong, with lower prices on the CBOT and still no regular global supply. Prices continue firm for the old crop, 2024/25, due to exports, while the new crop will bring pressure due to the planting intention report on the 31st.

The tariff movement for the corn market, imposed by the United States, has not had any direct negative influences on local exports so far. Mexico, the biggest concern, is aligning itself with the proposed adjustments and has not shown any bias toward future taxation of US products, let alone corn. Canada, so far, has been fighting back against tariffs, but nothing has yet affected the corn market. At this point, the risk is a tariff on ethanol/DDG from the United States, which could directly affect the local ethanol industry. Europe has restrictions on GMOs, on corn imports from the United States, and a tariff would also have little direct influence in practice.

Indirectly, however, China has imposed a 10% tax on US soybeans at a time when Midwestern producers are deciding whether to plant, and this could have a significant impact on the planting intentions to be announced by USDA on the 31st. In other words, US producers are afraid of seeing soybeans at USD 8.00/bushel again due to the loss of sales to the Chinese market, which could have an impact on planting decisions. This could create more areas for corn or more areas without planting. Europe is also a concern, given that it is a major importer of soymeal and soyoil, and this could also affect the soybean complex, with above-normal lows in soymeal and soyoil. The current situation for international prices is controversial, while the market seems to be ignoring this pessimistic bias for the US and keeping prices on the CBOT above USD 10/bushel. The bias is bearish for soybean prices on the CBOT, due to the tariffs, but the market is not giving in, reflecting this more evident scenario. Could that contain the area cut?

While the market is aligning itself with new-crop corn and soybean contracts, September onward, the outlook for the old crop is still solid for prices. The reason for this environment continues to be the flow of weekly sales. With prices on the CBOT near USD 5.00/bushel, demand for US corn exports could slow down, until the entry of the Argentine crop. However, the market misinterpreted the effect of tariffs on US corn, and the price lows over the last three weeks ended up boosting exports even further.

Last week, sales reached 1.5 mln tons, well above the average of 1 mln. The accumulated sales for the business year are now 52 mln tons, with the USDA’s annual estimate still at 62 mln. There are 20 weeks left until the end of the current business year, 24/25, on August 30, and if weekly sales continue at the pace of 1 mln a week, USDA will have to aggressively change its number upward until reaching a cut in stocks. We can also expect highs in the CBOT futures and premiums in the coming few weeks due to this export scenario.

The entry of the Argentine crop is an important point at this time. The issue is that exports by the Argentine market are still quite weak. So far, 1.7 mln tons of exports have been registered and 1.6 mln tons for April, which should evolve according to the harvest pace. Effective shipments are at 1.6 mln tons in March, compared to 3.8 mln in March 2024. This reflects that the Argentine corn stocks may have been lower than expected, and so there is no old-crop corn to export at this time. Besides, the local market is benefiting from the reduction in retentions from 12% to 9.5% but is complaining about the exchange rate. However, the Argentine market just cannot retain 48 mln tons of corn and 48 mln tons of soybeans. At some point, supply will come to exports. Owing to this delay in sales, demand still falls upon the only major global supplier at the moment: the United States.

Tags: soymeal, Market, Argentina, China, Mexico, exports, soyoil, corn, tariffs, prices, soybeans, US, crop, shipments