by Ken Root
Pro Farmer reports that Mexico purchased 709,200 metric tons of U.S. corn the week prior to the U.S. elections, which was three times the average volume for the preceding month. Pro Farmer says the move proved prudent, since the results of the U.S. election sent the peso to an all-time low against the dollar, increasing corn prices in pesos ten-fold. Traders and industry analysts report that Mexican demand for U.S. grain imports has since slumped. However, they also stress that Mexico has few other options for grain besides the U.S. and it needs to import around 10 million metric tons or more of corn each year. Mexico is the number one buyer of U.S. corn and pork.
Exports of corn as a % of the total USDA projection for the year are at 49% vs. the 5yr average for this date of 46%. Accumulated shipments as a % of the total are also running ahead of their 5yr avg for this date (18% vs. 16%). The national average cash price for corn according to DTN is $3.02 1/2.
Trump’s sabre rattling regarding dismantling the North American Free Trade Agreement (NAFTA) could negatively impact Mexican purchases of corn, pork and other agricultural products.