The outcome of the US presidential election is seen as decisive for the country’s agriculture, with the new president Donald Trump assuming office amid low commodity prices and falling farm incomes.
The Platts assessments from S&P Global Commodity Insights for US corn and soybean show October prices recovering on the month, but still significantly below last year.
The season average farm price projections in the marketing year 2024-25 for corn, soybeans and wheat are close to MY 2020-21 levels — indicative of declining producer margins — according to the US Department of Agriculture.
The USDA data showed MY 2024-25 export projections rising year on year, however, market sources anticipate uncertainty around supplies to China in the event of tariffs and protectionist policies. US agricultural supplies to China dropped between MY 2017-18 and MY 2018-19, before rebounding in MY 2019-20 and MY 2020-21.
China is an important destination for US agricultural supplies.
In MY 2022-23, China’s share in total US exports stood at 17.83% for corn, 58.19% for soybeans and 5.59% for wheat, the USDA said.
According to MY 2023-24 export estimates, China accounted 4.83% for corn, 52.45% for soybeans and 10.98% of wheat shipments from the US, indicating a jump in wheat and corn shipments but a decline in soybeans.
Trump advocated during his campaign stronger tariffs and the passing of the Trump Reciprocal Trade Act to prioritize US producers over foreign supplies. Market sources expect that Trump’s return to office could bring back tariffs and eventually countertariffs from China, which could have a big impact on agricultural trade between the two countries.
Source: Platts
