Arlan Suderman, Chief Commodities Economist at StoneX, explores trade, agriculture, and biofuel market developments shaping U.S. agriculture.
Key Takeaways
Mexico trade negotiations stall while USMCA review looms
Screw worm concerns keep Mexican cattle from US markets
Mexico corn buying hits record flash sales pace
Mexico Remains a Critical Trade Partner
Suderman emphasized that Mexico remains the most important U.S. trading partner despite the focus on China. “Mexican exports to the United States are said to account for one out of three jobs down there”. With Mexican retail sales down 9%, the country needs a trade deal to stabilize its economy. The upcoming USMCA review increases urgency as both sides prepare for complex negotiations.
Cattle Supply Faces Tight Conditions
USDA officials confirmed the discovery of a screw worm infestation less than 70 miles from the U.S. border. “We’re not likely to see Secretary Rollins open the border with Mexico anytime soon for cattle”, Suderman explained. This decision limits U.S. access to Mexican cattle just as herds are already tight. At the same time, producers are reluctant to hold back heifers for breeding, worsening the long-term supply outlook.
Uncertainty Around Incentive Plans
The Trump administration has signaled a plan to increase U.S. cattle supply later this week. Markets interpreted this as potential financial incentives to rebuild breeding herds, though specifics remain unknown. “What kind of incentive program will it be? We don’t know yet”, Suderman said. Options such as tax credits, grazing access, or cash payments leave producers waiting for clarity before making decisions.
Corn Sales Accelerate as Soybeans Stall
Mexico continues to buy U.S. corn at a record pace, with flash sales totaling more than 34 million bushels in a week. “This suggests we’re going to continue our record selling pace of corn sales to Mexico and to the world for some time yet”, Suderman observed. By contrast, soybean fundamentals remain stalled due to slow Chinese demand. The biofuel program also faces uncertainty, keeping traders cautious until final guidance is released.
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