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Monday - last edited Monday
Well, what do you think? On Monday, a Mexico Senator announced that he will introduce a bill, this week, to have his country buy their corn supplies from Brazil and Argentina and stop purchases from the U.S.
Choose Your Response:
A. It will be passed.
B. The Mexico buyers won't be able to make it without U.S. corn.
C. Doesn't matter, because there is another world buyer out there to replace Mexico
D. The corn market will take a haircut, if this goes through.
The trade is weighing in. I put the Mexican corn legislative bill question to a trader source of mine. Here is his response, in his own words:
"Ok, so Cargill US will ship corn to Cargill Mexico from Cargill Argentina or Brazil.... I would call Cargill or Bunge for a comment.. They take 14 mmt of corn from the US most of it is railed across the boarder.. they can't rail from Argentina .. and 2nd crop corn from Brazil won't be available until... July/August.. and figure the Mexican senator, can find a subsidy for 20-30 dollars a ton in extra freight and handling costs.. but it might be good bluster.. and we can all fall on our face for a day.. as we listen to the howling.. we have also heard the Chinese have their own directives slapping punitive duties on US soy bean exports.. but will hold off until the appropriate counter veiling duty time.. some time after Trump talks a little too tough.. or after the Export shipping pace from Brazil is fully engaged middle of April..
They both need the grain.. if they want to bow out of the US market for 1 -5 months they can.. and they can pay the price... for higher costs to import....if Brazil or Argentine capacity gets over whelmed..
Mexico.. 20 % of our meal exports go to Mexico.. 1/2 billion lbs of soy oil 14 mt of corn.. and i think a lot of meat still goes accross.. all by rail and truck.. what is the back haul??...I think that is what Trump is worried about..
I am short by the way.. so bring it on.. US farmer is sitting on too much old crop corn.. the market does not need the acres we are not promoting with Dec on the highs.. and beans are too long with SA crop watchers raising production.. and all ok signal on shipping pace so far.. start a trade war in corn over the next 2 months and you will have 90 million acres of bean planted by June 1...."
What do you think of this trader's response to a Mexico Senator introducing legislation to block U.S. corn purchases?
Well, it will obviously be an `excuse` to hammer the market..not a reason. But if it`s one crazy Mexican senator, we`ve got crazy senators too like Elizabeth Warren, they propose alot of errr ...stuff that thankfully never comes to fruition. If Mexico would pass the "Brazil corn purchase" , that would be the first actual salvo fired in this so far "war of words". One has to ask, if Brazil and Argy is equally cheap and reliable, why aren`t they purchasing corn there now? Mexico doesn`t exactly have a track record of doing us any favors.
But I look at the entire picture we run a $60 billion trade deficit with Mexico and US companies have a business model of hiring illegals that work below a living wage or sending the manufacturing down there and elsewhere to take advantage of cheap labor, low environmental & safety regulations. It seems agriculture is the one tiny bright spot in our dealings with that country. You add up all our costs of a domestic population that`s out of the workforce and under-employed, that corn and pork that we export them is at a pretty high price.
Monday - last edited Monday
Let's see ...their bins are empty and their May be some slight hiccups in this year's timely plantings the major corn crop
(Corn Planting in Brazil)
Mexico is not set up to suddenly import all their corn needs by ship
Rail at the inland processors is the set up. Not gonna change overnight, and even if it did where are the ones that normally buy SA' s gonna get their needs filled in the mean time?
Next is the added costs to ship it in and handle it more times.
Do you really think they want to pay another 75¢ to a $ a bu? If they do I'll teach my corn Portuguese.
Seems to me that it will hurt the billionaires that run the railroads and the grain companies the hardest. I doubt that they let their political contributions get wasted. I would suspect that a deal will be made.
"Ok, so Cargill US will ship corn to Cargill Mexico from Cargill Argentina or Brazil.... I would call Cargill or Bunge for a comment
This is funny - Just a few years ago - Bunge was shipping beans in from S.A. - Up ole Muddy to the Queen City - then trucked here - OR the other BIG grain companies shipped wheat - what ever in the S.E coast for company's like Smith Fields or others - The same companies that what to ----- " Help " us market our own grain - what a joke ! It's All about them .
Years ago - I had read that Monsanto did NOT charge the S.A. counties a " Tech " fee like they did us ! We paid for it then they sent -- THERE seed down there to grow a market share and increase THERE profits - How about a little increase on tech fee's to them counties now ???? We can level the playing field if they want -
Mexico ? Eat your taco's made from rice and sea weed .
I doubt that the good people of Mexico want any of this, like in Tony`s comments this morning it has a "slim chance" of passage, I suppose it`s one or a handfull of radical Mexican politicians stiring the pot. Just like the radicals in this country.