Canada Markets
Canadian Corn Imports are Virtually Non-Existent to Date, Can They Recover?
Given how significant corn imports are to the Western Canadian feed grain markets and how vastly different the situation is from three short years ago, I wanted to provide an update and a brief outlook.
In short, the economics of importing U.S. corn simply haven't been working so far. The USDA reported on Jan. 16 that total commitments to date for corn sales to Canada (outstanding sales plus actual exports) stood at 105,700 metric tons (mt). That seems quite weak compared to 814,400 mt at this point last year. But to really put it in perspective, it compares to total commitments of 3.252 million metric tons (mmt) by this stage of the 2021-22 crop year. And that's not a misprint.
What makes it even more interesting is the fact that last summer's barley crop wasn't all that much larger than it was in 2021-22. According to Statistics Canada, 2024-25 production totaled 8.144 mmt compared to 6.984 mmt three years ago -- only 1.160 mmt larger. Yet U.S. corn imports total commitments to date are 3.146 mmt less. That might matter before the end of the crop year unless something starts changing soon.
Likely the most important question to ask at this point -- is the current USDA estimate for Canadian corn imports of 2.20 mmt even attainable given the snail's pace to date and the limited supply available?
The USDA surprised the market on Jan. 10 with its final crop production summary for 2024-25 and its World Agricultural Supply and Demand Estimates (WASDE) update. It lowered the final corn yield and production far more than expected, both results coming in below the lowest pre-report estimate. A whopping 276 million bushels (mb) was cut from total production with most of that carried right through to ending stocks, falling 198 mb from the previous month.
Surprisingly, Feed and Residual Use was reduced by 50 mb (given grain consuming animal units were higher versus last year) and 25 mb were taken off the export total. Given total commitments to date could have justified an increase in the export estimate, a decrease caught the market off guard. Those two surprising reductions suggest the 1.540 billion bushel (bb) ending stocks currently projected is likely a minimum pipeline level according to the USDA.
With the increase in grain consuming animal units compared to the year earlier and the record profitability seen in the livestock sector, any future adjustments should be higher for the feed use category.
Record levels of ethanol production and strong energy markets suggest any future adjustments should be higher for this category as well.
That leaves exports to be rationed out between the highest bidders. A recent blog on tight ending stocks in major corn exporting countries https://www.dtnpf.com/… pointed out that they are projected to be down to 8.04 mmt at the end of the 2024-25 marketing year from 16.06 mmt the previous year and 18.47 mmt in 2022-23. Given that, it should be a surprise to no one that there is significant competitive interest in U.S. corn from importing nations.
Thursday's U.S. weekly export sales report highlighted that fact. Total commitments as of Jan. 9 stood at 40.270 mmt compared to 31.527 mmt last year or 28% higher. As a percentage of the USDA's annual projection, 65% of the estimated exports are spoken for or shipped, up from the five-year average of 61%. Either the export estimate will need to increase, or sales will need to slow. With ending stocks considered at pipeline levels, it may have to be the latter. And that's where it becomes a problem for an importing country like Canada. If the economics hasn't worked so far, how will they improve under this scenario?
So, what happens if the imports of corn from the U.S. do fall short of estimates and requirements? Clearly, barley exports need to be slowed as soon as possible. Agriculture and Agri-Food Canada (AAFC) expects a lack of barley supplies will result in a reduction of 174,000 mt in exports compared to last year. The problem is the trade didn't get the message and actual exports in the first 23 weeks of the marketing year were 136,000 mt ahead of last year's pace according to Canadian Grain Commission weekly grain statistics. That amounts to a 310,000 mt difference in demand -- if the pace for the remaining 37 weeks simply matches last year.
According to AAFC estimates, ending stocks of barley are already set to be the fourth lowest of the past 25 years. With 800,000 mt currently projected, 310,000 mt greater exports would leave ending stocks below the 542,800 mt remaining after the devastating drought of 2021. Without the more than 6 mmt of corn imports to offset.
Adding to the challenge of trying to cut exports is the world needs our barley. Following two consecutive years of low production, world supplies are near record lows and total global exports are expected to fall 5.855 mmt from last year by necessity according to the most recent USDA update.
In short, given relatively tight Canadian feed supplies across the board, there really is no substitute for a lack of corn imports. As such, economic theory suggests it will take higher prices to make such imports feasible and to choke off barley exports. What those values will be is hard to say but they will clearly have to be high enough to compete with global corn importing nations.
Prices have already responded somewhat. According to pdqinfo.ca, southern Alberta feed barley values have increased from a low of $248.61/mt ($5.41 per bushel) set in late August to $299.40/mt ($6.52 per bushel) currently.
From a marketing and risk management point of view, being patient and making incremental sales that reward rallies along the way continues to appear to be an appropriate strategy for sellers at this point. Feed users may want to use any setbacks to secure supplies.
I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.
Mitch Miller can be reached at mitchmiller.dtn@gmail.com
Follow him on social platform X @mgreymiller
(c) Copyright 2025 DTN, LLC. All rights reserved.