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U.S. farmers are coming off a bumper corn crop, harvesting a new record yield of 177.3 bushels per acre for a bin-busting total of 15.342 billion bushels. That's a huge pile of corn to disperse as growers gear up for the 2024 season. The February "WASDE" report pegs carryout at 2.1 billion bushels. Commodity markets have certainly taken notice of the surplus. March $4.29 corn futures sit at multiyear lows and at $4.68 on December futures (posted mid-February).

In a bit of good news, as of Feb. 1, DTN Lead Analyst Todd Hultman reports there have been 1.374 billion bushels of U.S. corn export sales, up 30% from a year ago. To date, Mexico has been the largest buyer, accounting for 623 million bushels of sales and shipments. Japan is a distant second with 207 million bushels, but that's more than double a year ago, he points out. Yet, exports are below the four-year average.

Maintaining our cost competitiveness is critical to U.S. corn exports in light of plentiful supplies putting downward pressure on price. Krista Swanson, lead economist for the National Corn Growers Association, points to several factors that will impact U.S. corn exports in 2023-24 and likely beyond.

CLIMATE. Widespread drought in the Corn Belt in 2023 led to record-low water levels in the Mississippi River basin. Swanson explains that resulted in barge weight and traffic restrictions, and contributed to a higher corn price at port. Corn moved by barge on the Mississippi River was 7.7 million tons, 30% lower than 2022 and 54% lower than 2021.

Climate-induced drier weather also forced substantial scaleback of shipping through the Panama Canal, a key global maritime channel. DTN has reported extensively about the shipping disruptions. Scan the QR code (left) to learn more.

Traffic was reduced to 24 ships a day, about two-thirds of normal traffic. Typically, Swanson says 18% of U.S. corn exports travel through the Panama Canal, which offers the most efficient route from the Gulf ports to Asian nations. That's important because China and Japan have received about one-quarter of U.S. corn exported to date in the 2023-24 marketing year. Authorities are hoping the timely start of the normal rainy season will help alleviate the low water levels.

CONFLICT. Attacks on ships in the Red Sea affect passage through the Suez Canal, another major global shipping channel. The most efficient route from the U.S. Gulf to Kashima, Japan's, leading port for receiving corn imports is a 50-day route through the Suez Canal, Swanson explains. Unfortunately, safety concerns and added canal fees have dropped traffic through the Suez Canal by 36% (January 2024 vs. January 2023).

The next best alternative is a 54-day trip around the Cape of Good Hope, at the southern tip of Africa, and the 57-day trip around Cape Horn or through the Strait of Magellan, at the southern tip of South America. That's nearly double the time in transit compared to through the Panama Canal, she adds. U.S. corn could be shipped from Pacific Northwest ports in just 14 days, but that's only cost-effective for corn grown in the northwestern U.S.

The Panama Canal is also the shortest route for corn from Brazil to Japan. However, grain from Brazil's ports can reach Japan around the Cape of Good Hope in about 10 to 15 fewer days compared to shipments from the U.S. Gulf. Exports from Argentina's primary grain port have a similar advantage. Shorter transit time translates to better cost competitiveness for South American corn.

American agriculture competes in a global market. Politics, trade policy, the global economy and strength of the dollar have long been factors influencing U.S. commodity exports. But, lingering climate and conflict bring additional challenges that only add to the complexity of cost competitiveness for U.S. corn exports now and in the future.

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-- Learn more about the Panama Canal water levels at https://www.dtnpf.com/…

-- Email Gregg Hillyer at gregg.hillyer@dtn.com, or follow Gregg on X (formerly Twitter) @GreggHillyer

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