Good News, Bad News for Corn Market

After getting some good news on Friday, the corn market was later hit with the bad news side of the equation. 

The good news was the US won its trade battle with Mexico over the latter’s attempt to block imports of GM corn – a victory that should keep American supplies flowing southward. Mexico is the top importer of U.S. corn, purchasing a record large 23.4 million tonnes in 2023-24. 

The bad news of course was U.S. government end-of-year legislation excluded a provision that would have allowed the permanent year-round sale of gasoline with a higher ethanol content (E15), something that would have buoyed corn demand. The provision was originally included in legislation last week but ultimately failed to make the cut after US President-elect Donald Trump and his allies raised concern about other costs and sent lawmakers back to the drawing board. 

“Corn growers are deeply disappointed that a permanent, year-round E15 solution was not included in the end-of-year legislation package. This no-cost provision would have provided a market-driven solution to farmers experiencing low corn prices,” National Corn Growers Association President Kenneth Hartman Jr said in a statement. 

Hartman said corn growers are calling upon legislators to address the matter quickly in the start of the new Congress in the New Year, “and fix this issue once and for all.” 

The USDA is estimating 2024-25 corn for ethanol use at 5.5 billion bu, up slightly from a year earlier. However, any additional corn demand from E15 gasoline is not expected to be significant. 

On the trade front, Mexican President Andrés Manuel López Obrador first set off alarms in the Corn Belt in December 2020 when he initiated a decree to ban genetically modified corn by the end of 2024. In 2023, the Mexican president issued a decree banning genetically modified white corn, effective the following day.  

The National Corn Growers Association (NCGA) and state corn grower groups responded by pushing the office of the US Trade Representative to file a dispute settlement under US-Mexico-Canada trade agreement (USMCA), which it eventually did. The USMCA dispute panel agreed with the US on all seven counts in the case.