Speedy corn plantings in U.S. South could lead to export clash

Source: By Michael Hirtzer, Reuters • Posted: Thursday, April 6, 2017

Farmers are planting corn at twice the speed of last year in Louisiana and are two weeks ahead in Texas – which could bring forward harvests to clash with peak exports from South America.

That could push global corn prices down further, depressing an already struggling U.S. farm economy where net incomes are likely to be at their lowest levels since 2002 this year.

“A lot can change between now and August, but right now it sure looks like it’s a buyer’s market,” a U.S. corn exporter said on Tuesday.

Farmers in these southern states have taken advantage of abnormally high temperatures in recent weeks that warmed up soils to work fields earlier.

Corn in Louisiana was 90 percent planted as of Sunday, up from 45 percent during the same week last year and above the five-year average of 70 percent planted, the U.S. Department of Agriculture said on Monday.

In Texas, corn was 56 percent planted, up from 41 percent a year ago and above the five-year average of 43 percent.

The early plantings should see corn in these states harvested a few weeks early. Harvest typically begins in late July.

That would put U.S. corn exports head-to-head with those of South America, which typically are busiest in August. Brazil and Argentina shipped nearly 6 million tonnes of corn in August 2016, according to Thomson Reuters data.

The United States exported 5.7 million tonnes of corn that month, compared with the year’s peak of 6.4 million tonnes in September, USDA data showed.

With global supplies likely to be abundant, there was little urgency among importers to lock in prices for shipments later this year, traders said. U.S. corn shipped in August was currently more expensive than Brazil corn, but prices could ease as crops near maturity.

U.S. Gulf corn for shipment in August was available for around $165 per tonne on a free-on-board basis, the U.S. trader said. That is down from about $170 per tonne a year ago.

In comparison, August-shipped Brazilian corn was offered at $162.50 per tonne.

While Louisiana is one of the smaller corn producers in the United States, about half of U.S. corn exports leave the country via the ports near New Orleans and shippers typically tap local supplies as soon as they become available.

Louisiana produced 90.75 million bushels of corn last year, compared with 2.74 billion bushels produced in the top-growing state of Iowa.

(Additional reporting by Karl Plume; Editing by Leslie Adler)