U.S. farmers could face more competition from South American corn and soybean producers, who are increasing their corn exports. However, Argentina is facing headwinds from its largest customer, China, which halted Argentine soy oil imports starting in January. And U.S. corn producers hoping to sell to Brazil’s northeastern poultry producers may have to wait for Argentine corn shipments there to unwind.
Brazil and Argentina each increased exports of new crop corn by 1 MMT from September, according to USDA. Brazil's estimated soybean production also was raised by 1 MMT in October to 102 MMT, and its corn harvest also went up 1 MMT to 83.50 MMT, according to USDA.Brazil’s soybean planting is progressing well and is 18% complete, according to Waster Street Solutions.
Argentina’s soybean and corn production remained unchanged from September, at 57 MMT, and 36.50 MMT, respectively. Argentina’s wheat production also stayed unchanged at 14.4 MMT, and Brazil’s wheat production increased slightly, from 6 MMT to 6.3 MMT.
Meanwhile, Brazil's northeastern poultry producers say they are not planning short-term purchases of U.S. corn, despite the government's recent decision to clear genetically modified varieties for import to ease tight supplies locally, according to a Reuters report. The reason? The country has already closed deals with Argentina before its government eased restrictions and authorized the import of up to 1 million tons of GMO corn by the end of the year.
Three of six shiploads of corn from Argentina are due to arrive from November through January, but that doesn’t rule out purchases of corn from the U.S., the vice president of the poultry association in Ceara state, Marden Vasconcelos, told Reuters.
China has halted its purchase of soy oil from Argentina, though other sales of other soybean products continue, according to news reports. Soy oil exports to China from Argentina have dropped 97% this year, and none of the 280 MT of soy oil China imported between January and July of 2016 came from Argentina, the world’s largest exporter of soybean oil.
The executive director of the Argentine-Chinese Chamber, Ernesto Fernández Taboada, says the plunge in soy oil imports is the result of China's decision to favor local producers over imports, according to a report by the Buenos Aires Herald. China is the world’s largest buyer of soybeans. However, India is now the No. 1 buyer of soy oil, according to a recent report in the Wall Street Journal.