Ongoing uncertainty surrounding US trade policies is impacting sales of new-crop corn and soyabeans, pulling them well below historical averages, according to a new report from CoBank’s Knowledge Exchange reported by World Grain.
Ongoing uncertainty surrounding US trade policies is impacting sales of new-crop corn and soyabeans, pulling them well below historical averages, according to a new report from CoBank’s Knowledge Exchange reported by World Grain.
As of 1 May, US new-crop soyabean export sales totalled 518,100 tonnes, the lowest volume at this point in the season since 2001 and 88% under the historical five-year average. Corn sales of 2.2M tonnes were 27% under their historical five-year average, while wheat sales of 2.6M tonnes were slightly ahead of their five-year average, the 23 May report said.
Many overseas buyers have reduced forward coverage and are buying in the spot market, complicating the picture for elevators and merchandisers that are heavily reliant on export demand, according to the report.
“Elevators and grain merchandisers with exposure to high-risk export markets, especially China, may be forced into widening new-crop basis to attract local demand,” Tanner Ehmke, grains and oilseeds economist with CoBank, was quoted as saying.
“Basis for corn, soyabeans and wheat is strong now. However, if new-crop sales remain lethargic, basis could weaken substantially, particularly for soyabeans in the northern Plains and northern Midwest with high exposure to the Chinese market.”
Although US reciprocal tariffs with most countries had been paused for 90 days, it remained unclear what would happen when the pause ended on 9 July, World Grain wrote.
At the time of the report, a 10% tariff was applied to all countries except for China, the tariff on which was at 30% after it rose to 145% at one point following the two countries’ tariff escalation.
China has applied a 15% import tariff on US corn and wheat, and a 10% tariff on US soyabeans and sorghum.
To date, only one trade agreement had been reached – with the UK – and the US administration had indicated that it could announce a different set of tariffs due to a lack of manpower to negotiate individual trade agreements with all countries, the report said.
Since Trump’s tariffs were initially announced, China had increased soyabean orders from Brazil, suspended soyabean shipments from three US companies and signed letters of intent with Argentine exporters to purchase soyabeans, corn and vegetable oil, World Grain wrote.
Mexico and Japan, the second and third largest markets for US soyabeans, were also lagging well below historical purchases of new-crop soyabeans at this time in the season, according to the report.
Strong old-crop sales and domestic usage had masked the drop in new-crop sales with total US export commitments for the 2024-25 marketing year up 27% for corn, 13% for soyabeans and 14% for wheat compared to the previous year.
Although processing margins for soyabean crushers and ethanol producers had been positive, the headwinds of trade uncertainty remained firmly in place for grain elevators and merchandisers that typically booked grain sales several months in advance, the report said.
While trade negotiations between the USA and China and numerous other countries have been announced, the lack of clarity on policy will continue to impact US new-crop grain and oilseed sales, according to the report.
“Elevators with the advantage of strong local demand from ethanol plants, soyabean crushers, flour mills and livestock operators will be shielded from the loss of export business,” Ehmke said.
“For those that do rely on export demand, lower rail rates could provide an opportunity for captive bushels to move east, while a weakening US dollar may attract new export demand from smaller markets to help backfill the loss of sales to China.”
