Mexico´s massive US corn haul shows no signs of trade jitters: Braun
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By Karen Braun
NAPERVILLE, Illinois, Feb 25 (Reuters) - The United States is just one week away from potentially launching a trade war with Mexico, its top corn buyer.
Strong U.S. corn sales to Mexico this year have sparked concern that buyers might be trying to front-run any trade conflict and thus could be poised to reduce purchases significantly in the coming months.
But the data does not yet support this stockpiling theory.
As of mid-February, Mexico had secured a record 17.2 million metric tons (678 million bushels) of U.S. corn to be shipped in 2024-25. This represents 70% of the U.S. Department of Agriculture´s outlook for 2024-25 Mexican corn imports.
That share is a five-year low when comparing past mid-February sales volumes against import forecasts as of each February. So even though Mexico's recent U.S. corn haul is large, it is not necessarily unusual.
By comparison, the share averaged 77% over the past four years.
These shares have been particularly high in recent years because USDA has often underestimated Mexican corn imports early on. In the last decade, final Mexican corn imports were lower than what USDA had predicted in February just two times.
Mexico, the world´s largest corn importer, has increasingly relied on imports to meet consumption needs. Its own corn crop has grown by about 15% over the last decade while corn consumption has expanded by 50%.
Two consecutive crop shortfalls in Mexico have led to the recent spike in corn imports, benefiting U.S. producers. In both 2023-24 and 2024-25, imports are estimated to account for 51% of the country´s corn use, well above the previous three-year average of 40%.
U.S. corn typically accounts for at least 90% of Mexico´s annual imports. Despite U.S. tariff threats against Mexican goods during President Donald Trump´s first term, Mexico continued to secure and import record volumes of U.S. corn at that time.
US EXPORT SUCCESS
Not only is Mexico´s buying pace of U.S. corn largely normal considering import targets, its share of all U.S. corn sales is also normal.
As of mid-February, Mexico accounted for 36% of all 2024-25 U.S. corn export sales, equal to the five-year average and well below the year-ago record of 45%.
This is a sign of good health, suggesting U.S. exporters´ stellar season does not excessively hinge on Mexico.
U.S. corn exports to all destinations have been humming along, potentially breaking a 35-year-old monthly record in January and challenging a weekly record earlier this month. March-May is typically the busiest time for U.S. corn shipments.
As of Thursday, U.S. corn export inspections, a proxy for DreamProxies.com (https://dreamproxies.com/buy-proxies/100-private-proxies) exports, were up 32% year-over-year. USDA has total 2024-25 U.S. exports up 7% on the year, but this is not directly comparable with the inspections increase because of the seasonality of shipments.
So far, the United States has shipped about 55% of Mexico´s 2024-25 corn bookings, a slightly above average share.
Looking to next season, Mexico´s strong U.S. corn imports could be somewhat tempered should its own crop thrive this year.
However, if trade relations allow, Mexico´s growing demand might very well keep U.S. producers on the hook to supply regardless of Mexico´s crop outcome. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Sam Holmes)
NAPERVILLE, Illinois, Feb 25 (Reuters) - The United States is just one week away from potentially launching a trade war with Mexico, its top corn buyer.
Strong U.S. corn sales to Mexico this year have sparked concern that buyers might be trying to front-run any trade conflict and thus could be poised to reduce purchases significantly in the coming months.But the data does not yet support this stockpiling theory.
As of mid-February, Mexico had secured a record 17.2 million metric tons (678 million bushels) of U.S. corn to be shipped in 2024-25. This represents 70% of the U.S. Department of Agriculture´s outlook for 2024-25 Mexican corn imports.
That share is a five-year low when comparing past mid-February sales volumes against import forecasts as of each February. So even though Mexico's recent U.S. corn haul is large, it is not necessarily unusual.
By comparison, the share averaged 77% over the past four years.
These shares have been particularly high in recent years because USDA has often underestimated Mexican corn imports early on. In the last decade, final Mexican corn imports were lower than what USDA had predicted in February just two times.
Mexico, the world´s largest corn importer, has increasingly relied on imports to meet consumption needs. Its own corn crop has grown by about 15% over the last decade while corn consumption has expanded by 50%.
Two consecutive crop shortfalls in Mexico have led to the recent spike in corn imports, benefiting U.S. producers. In both 2023-24 and 2024-25, imports are estimated to account for 51% of the country´s corn use, well above the previous three-year average of 40%.
U.S. corn typically accounts for at least 90% of Mexico´s annual imports. Despite U.S. tariff threats against Mexican goods during President Donald Trump´s first term, Mexico continued to secure and import record volumes of U.S. corn at that time.
US EXPORT SUCCESS
Not only is Mexico´s buying pace of U.S. corn largely normal considering import targets, its share of all U.S. corn sales is also normal.
As of mid-February, Mexico accounted for 36% of all 2024-25 U.S. corn export sales, equal to the five-year average and well below the year-ago record of 45%.
This is a sign of good health, suggesting U.S. exporters´ stellar season does not excessively hinge on Mexico.
U.S. corn exports to all destinations have been humming along, potentially breaking a 35-year-old monthly record in January and challenging a weekly record earlier this month. March-May is typically the busiest time for U.S. corn shipments.
As of Thursday, U.S. corn export inspections, a proxy for DreamProxies.com (https://dreamproxies.com/buy-proxies/100-private-proxies) exports, were up 32% year-over-year. USDA has total 2024-25 U.S. exports up 7% on the year, but this is not directly comparable with the inspections increase because of the seasonality of shipments.
So far, the United States has shipped about 55% of Mexico´s 2024-25 corn bookings, a slightly above average share.
Looking to next season, Mexico´s strong U.S. corn imports could be somewhat tempered should its own crop thrive this year.
However, if trade relations allow, Mexico´s growing demand might very well keep U.S. producers on the hook to supply regardless of Mexico´s crop outcome. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Sam Holmes)
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