WASHINGTON, D.C., U.S. — With 96% of this year’s U.S. corn crop harvested as of Nov. 15 according to the U.S. Department of Agriculture’s (USDA’s) weekly Crop Progress report, U.S. farmers are now turning toward the market, looking for pockets of demand to sell their crop.
This season’s harvest of grain corn is predicted to be 345.5 million tonnes (13.6 billion bushels) with 45.7 million tonnes (1.8 billion bushels) destined for export, according to the USDA World Agricultural Supply and Demand Estimates (WASDE) report.
The strong dollar is causing export demand to be weaker than would typically be expected for such a large crop with prices currently below $4 per bushel. The USDA reported lower corn inspections last week compared with the same time last year, putting total exports for the 2015-16 marketing year down 24% from a year ago.
Still, international markets are active, and customers are looking for details of the new crop’s availability and quality. For instance, U.S. corn sales to Mexico as of Nov. 12 totaled 5.6 million tonnes (220.4 million bushels), up 5.7% from last year, the U.S. Grains Council (USGC) reported. Japan and Latin America also continue to be leading buyers of U.S. corn, and additional exports of distiller's dried grains with solubles (DDGS), ethanol, meats and dairy - as well as other feed grains including barley and sorghum - will further increase the total of grain equivalents exported.
“This is typically the time the U.S. is competing most directly with other origins for market share,” said USGC Chairman Alan Tiemann, who farms in Nebraska. “But the strong U.S. dollar is causing U.S. corn to not be priced competitively against supplies from Brazil and Ukraine.
“However, U.S. origin corn has other advantages including being graded by one of the most transparent and reliable systems in the world. We are also able to consistently deliver the grain specified in our contracts in a timely manner. These are important advantages that our overseas customers value,” he said.
The current low prices are creating buying opportunities around the globe and can offer international customers the opportunity to invest in their businesses, ultimately growing long-term demand. USGC is working closely around the world on trade servicing activities including the coming roll-outs of quality reports on both corn and sorghum.
In addition to a strong corn marketing program in 2016, USGC said it will be stepping up its ethanol and DDGS export promotion programs. U.S. ethanol is an extremely competitive, cleaning-burning source of fuel, and the Council is seeking to build demand overseas for the commodity.
“The council is helping to build on our buyers’ past positive experiences with U.S. grain as well as enter new markets through networking opportunities with U.S. sellers and providing our customers unique information,” Tiemann said. “By doing this, we are helping simulate demand today and creating long-term relationships, too.”