Competitors aggressively outsell U.S. corn
According to the USDA's "Grain: World Markets and Trade" report, recent quarterly shipment data show U.S. corn exports dropping to the lowest level in at least two decades. South American shipments, Brazilian in particular, have tripled even in the face of new-crop U.S. supplies.
Drought-reduced production drove up U.S. prices at the same time that key competitors had record or near-record supplies. Simultaneously, early Brazilian soybean shipments and a smaller crop provided port availability to boost corn exports.
Black Sea (mostly Ukrainian) corn has been competitively priced, making its way to traditional U.S. markets such as South Korea and Japan. The tailing-off of wheat exports from the Black Sea should provide traders with ample port capacity in the months ahead to execute sales.
Consequently, U.S. corn exports for the year are poised to drop to the lowest level in over 40 years, falling below wheat exports. Competitor trade has contributed to U.S. exports crashing by nearly 60 percent in just 5 years, despite world demand trending higher.
Since late November, U.S. prices have shed about $1.00 per bushel (nearly $40 per ton) and are now competitive against South American and Ukrainian prices. U.S. export sales (and shipments) are expected to surge in coming months given strong global demand and constraints on South American infrastructure.