Vietnam snaps up US corn as price overcomes moisture issues

Vietnam is turning to corn supplies from the US as the relatively low price compensates for quality differences that typically favour South American corn supplies, market sources have told Agricensus Wednesday.

“Vietnam is taking a bit more US corn. It doesn’t usually because of the moisture, but I think a couple of cargoes have traded from the US,” one trader said of the move.

US corn typically has a moisture content of 14%, versus South American or Black Sea corn where the moisture content is 12.5%.

That difference in moisture content has repercussions for storage, particularly in humid climates, and can limit options for those buying that corn.

“It lasts longer in your warehouse; there’s typically a premium attached to South American corn as it gives you that flexibility,” the trader said.

But with South American corn supplies dwindling as the region reaches its typical end of harvest period, the US has emerged as the most competitively priced origin globally.

“The US is the cheapest. Aat the end of the day our business is all about the price. From January, because of the lack of Panamax availability in South America, prices increase,” a second trading source said.

Agricensus assessed the US Gulf at $162.50/mt Wednesday, versus Argentina at $166.25/mt and Ukraine at $171.50/mt.

While Agricensus doesn’t assess the Pacific Northwest corn market, market participants put physical premiums for the PNW at a 95 cent premium over the front month CBOT futures contract – equating to $4.5050/bu, or $177.25/mt.

The most recent USDA export sales data for the week ending January 11 shows 60,000 mt of outstanding sales earmarked for Vietnam, but accumulated exports up to that point are zero.

That compares with 251,200 mt as of the same point of 2017.