News
Flash sale potential for corn builds despite recent ‘dismal’ exports
An ag economist says a ‘dismal’ couple of weeks for U.S. corn exports might continue but potential for some large ‘flash’ sales is building.
The University of Missouri’s Ben Brown said traditional U.S. corn buyers like Mexico, Korea and Japan are still buying, but expectations aren’t being filled in other notable markets.
“China being one,” Brown said. “They’re still importing U.S. corn, but they’re not importing lots of U.S. corn like what we had anticipated. So, some weak signals on the corn side for U.S. exports at least in the time being.”
He said exchange rates are pulling down U.S. exports in general with a strong U.S. dollar and a weak Chinese currency making American products more expensive compared to competitors.
“The other thing that happens here is that the price signals are moving in the wrong direction for Chinese consumers that can’t buy as much and the product’s getting more expense so they’ll buy less,” he said.
But Brown said the longer-term outlook is more positive for U.S. exports. He says South American drought pressures are expected to continue into June, hurting Brazil’s second crop corn (Safrinha) production.
“And that crop is already struggling from some dryness,” he said. “So, potentially, as we get into the next couple weeks, we could see some large flash sales of corn to countries looking to ensure that they have the product.”
Brown made his comments on Brownfield’s Weekly Commodity Market Update Tuesday.
