It may not last if Brazil’s corn production lives up to expectations, but the USDA World Markets and Trade report said in the first seven months of 2024/25 crop year, Japan, South Korea and Taiwan imported 10 million tonnes of US corn, a large gain from the 5.8 million in the same period last year.
US share of corn imports in these three markets jumped from 31% to 54% year-over-year, the USDA report said. With five months left in the marketing year, US corn exports may remain competitive in all three markets because of plentiful US supplies and favorable exchange rates.
US CORN COMPETITIVE
So far through this crop year, US corn exports have remained strongly competitive with South American origins because of abundant supply and competitive prices, with US total supply expected to be the fourth highest on record following consecutive years of strong production, the USDA said.
With plentiful supply, export bids for US corn have been lower than those for Brazil corn since October and lower than Argentina corn for most of the year, the report said. Availability of Brazil’s 2024 safrinha crop has been constrained by increased domestic demand for animal feed and ethanol production, while Argentina has a smaller crop.
MARKETS PRICE SENSITIVE
Japan, South Korea and Taiwan are highly sensitive to prices because of their significant dependence on imported inputs for feed, the USDA said.
In Taiwan, the government eliminated the 5% business tax on corn and soybean imports in 2022 to help stabilize feed prices. This policy has been renewed multiple times and currently is scheduled to last through Sep. 30, 2025.
In South Korea, price influences the choice between importing more corn or wheat, as both serve as alternative feedstocks for compound feed production, the report said.
Japan mainly imports corn from the US and Brazil, switching suppliers based on price, the USDA said.
WEAKER DOLLAR HELPS
Along with competitive prices, a weakening US dollar also supported demand for US corn, the report said. The new Taiwan dollar and South Korean won strengthened against the US dollar since the beginning of the 2024/25 crop year.
By the end of May, the Taiwan dollar was near a three-year high while the Korean won climbed to a seven-month high, the USDA said.
Looking ahead, US corn may stay competitive against South American corn, even with the upcoming crops in Brazil and Argentina as FAS Export Sales Reporting also show US exports to the region remain strong with outstanding sales to South Korea and Taiwan more than double those of the previous year.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $229.67 per cwt to $239.21, compared with last week’s range of $225.15 to $243.37 per cwt. FOB dressed steers, and heifers went for $362.79 per cwt to $373.15, compared with $353.24 to $379.61.
The USDA choice cutout Thursday was up $0.11 per cwt at $395.05 while select was up $3.45 at $379.74. The choice/select spread narrowed to $15.31 from $18.65 with 70 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $403.65 per cwt, and 50% beef was $233.87.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.35 a bushel over the Jul corn contract, which settled at $4.09 1/2, down $0.00 1/2.
No live cattle delivery notices were posted.
The CME Feeder Cattle Index for the seven days ended Wednesday was $311.39 per cwt, up $0.79. This compares with Thursday’s Aug contract settlement of $303.30, up $0.01.