Key Takeaways
- CoBank reports that trade uncertainty is negatively affecting U.S. new-crop grain export sales, especially for soybeans and corn.
- Export-dependent grain elevators and merchandisers may face weaker basis levels and greater reliance on local demand in the 2025/26 marketing year.
- As of May 1, new-crop soybean export sales were down 88.2% and corn was down 26.9% year-over-year.
- China’s absence from U.S. grain markets and shifting global trade relationships contribute to reduced forward purchasing.
- Domestic demand and alternative export options may shield some operators from the effects of international volatility.
CoBank Highlights Risk to U.S. Grain Sector from Trade Policy Uncertainty
In a newly released research brief, CoBank’s Knowledge Exchange warns that ongoing uncertainty in global trade policy is creating challenges for U.S. grain elevators and merchandisers, particularly those with heavy exposure to export markets.
The report emphasizes that unclear tariff policies—particularly in U.S. trade relations with China—have contributed to a significant slowdown in new-crop export sales, forcing many buyers to shift to short-term purchases in the spot market.
CoBank Points to Reduced Forward Coverage in Key Export Markets
According to CoBank, U.S. new-crop soybean sales as of May 1 were down 88.2% from their five-year average, with corn sales down 26.9%. Wheat sales remained slightly above historical averages, but overall foreign forward purchases were subdued.
China, once a major buyer, currently has no new-crop commitments for U.S. corn, soybeans, or wheat. The report also notes that Mexico and Japan—other top markets for U.S. soybeans—have been purchasing below average levels, while grain sales to the Philippines, Korea, and Latin America are also lagging.
CoBank: Domestic Demand Temporarily Supports Basis
CoBank’s analysis notes that strong domestic demand from ethanol producers, soybean crushers, and livestock feed markets has helped maintain a firm basis for old-crop grain. However, that support may not extend into the next marketing year if export volumes remain limited.
Tanner Ehmke, grains and oilseeds economist with CoBank, stated: “Basis for corn, soybeans and wheat is strong now. However, if new-crop sales remain lethargic, basis could weaken substantially, particularly for soybeans in the northern Plains and northern Midwest with high exposure to the Chinese market.”
Report Identifies Opportunities Amid Trade Challenges
The report from CoBank notes that grain elevators and merchandisers with access to strong local demand—from ethanol plants, crushers, and flour mills—may avoid the brunt of reduced export business.
Additionally, lower rail rates and a weaker U.S. dollar may enable new opportunities in non-traditional export markets, helping to offset declining sales to large buyers such as China.
Despite multiple ongoing trade negotiations, CoBank concludes that the absence of clear, stable policy remains a key concern for forward planning in the grain merchandising sector.
Read the complete report here.
