(CNBC) – Mexican importers, who usually buy their corn from the United States, have booked a 35,000-tonne corn cargo from Brazil, amid a trade spat between Washington and Mexico City.
Brazilian broker and consultancy INTL FCStone said on Wednesday the cargo would be loaded at the northern port of Santarém and scheduled to depart on June 22, according to port line-up data.
The deal comes as Mexican authorities are holding last minute talks with Washington to stave off the imposition of U.S. tariffs on Mexican goods from next week. Mexico is the main destination for U.S. corn exports.
“It is not common to see Brazilian corn exports to Mexico, and there is all this issue with possible U.S. tariffs,” said Lucas Pereira, an FCStone grains analyst in Brazil.
“It might be a signal from Mexico to show that they can source corn elsewhere,” he told Reuters.
The United States is having a troubled start to the new grain crop, with large planting delays for both corn and soybeans due to excessive rains. That situation could cut future U.S. corn supply.
This would be the first corn export sale from Brazil to Mexico since a cargo of 33,000 tonnes in January, according to Brazil’s Agriculture Ministry.
Pereira said the corn heading to Mexico is probably from Brazil’s top grain state of Mato Grosso. Part of the state’s production is sold overseas through northern ports, such as Santarém, located in Pará state.
Mexico tapped the Brazilian corn market in 2017 and 2018 when the country was negotiating a renewal of the NAFTA trade deal. Brazil sold 800,000 tonnes to Mexico at that time.
A deal would also be an indication that Brazilian exporters are pricing local grains attractively, as the country is harvesting a record crop near 100 million tonnes.
Traders reported on Tuesday that commodities trader ADM and others have sold several cargoes of corn to the eastern United States, with a large part to meat processor Smithfield Foods.
Reuters said on Wednesday that Mexican President Andres Manuel Lopez Obrador has received an official list of U.S. products that could be subject to retaliatory tariffs if duties threatened by the Trump administration take effect, but that list excluded corn, according to Mexican officials.
