Trade uncertainty dampens new-crop sales of US corn and soybeans

Ongoing uncertainty in international trade policy is casting a shadow over U.S. grain elevators and merchandisers. The lack of clarity on tariffs with key trading partners, particularly China, has driven new-crop sales well below historical averages. Many foreign buyers have shifted to spot market purchases, reducing forward contracts and complicating operations for elevators and merchandisers reliant on export demand.

According to a new research brief from CoBank’s Knowledge Exchange, prolonged uncertainty in new-crop export sales could force export-dependent elevators to rely more on local demand in the 2025/26 marketing year, which may be limited in some regions. Tanner Ehmke, CoBank’s grains and oilseeds economist, noted that elevators exposed to high-risk export markets like China may need to widen new-crop basis to attract local buyers. While basis for corn, soybeans, and wheat remains strong, sluggish new-crop sales could weaken it significantly, especially for soybeans in the northern Plains and Midwest.

As of May 1, U.S. new-crop export sales lagged far behind five-year averages: soybeans down 88.2%, corn down 26.9%, while wheat sales slightly exceeded the average. China has made no purchases of U.S. soybeans, corn, or wheat this year, instead boosting soybean imports from Brazil, suspending shipments from three U.S. companies, and signing deals with Argentine exporters for soybeans, corn, and vegetable oil. Mexico and Japan, major markets for U.S. soybeans, and wheat markets like the Philippines and Korea, also show below-average new-crop purchases.

Strong old-crop sales and domestic demand have partially offset the drop in new-crop sales. U.S. export commitments for the 2024-2025 marketing year are up 27% for corn, 13% for soybeans, and 14% for wheat year-over-year. Positive margins for soybean crushers, ethanol producers, and livestock feeders have supported local basis. However, trade policy uncertainty continues to challenge elevators and merchandisers who typically book sales months in advance.

Ehmke highlighted that some elevators with strong local demand from ethanol plants, soybean crushers, flour mills, or livestock operations may avoid the worst impacts. For export-reliant businesses, lower rail rates could enable grain movement eastward, and a weaker U.S. dollar might attract new demand from smaller markets, partially offsetting losses from China.

Despite these opportunities, ongoing trade policy ambiguity with China and other countries continues to hinder new-crop grain and oilseed sales. Without clearer policies, exporters face a shifting market landscape that may require significant adjustments.

Tags: corn, soybean, USA