Despite a news cycle dominated by trade tensions and policy pronouncements, corn futures have quietly rallied in recent weeks, approaching levels not seen since 2023. The March corn contract on the Chicago Board of Trade (CBOT) has consistently traded above $4.90 per bushel in early February, while the May contract has surpassed $5 per bushel.
“The corn market [is] lifting off its lows and coming up to one-year highs,” noted Mike Jubinville, senior markets analyst with Glacier MarketsFarm, in January, questioning if corn’s momentum would pull other commodities along.
Adding to the positive sentiment, the Mexican government recently reversed its stance on genetically modified (GM) corn imports, declaring previous measures to prohibit their use “ineffective.” This reversal is significant, as Mexico is the largest export market for U.S. corn. The U.S. Department of Agriculture estimates that this action “safeguards approximately $5.6 billion in U.S. corn exports to Mexico.”
For Western Canadian cattle feeders, the surge in corn prices and the shift in Mexican policy could have implications. With Prairie barley supplies tightening, increased U.S. corn imports are likely. A Statistics Canada report released February 7th indicated a 9.2% year-over-year decrease in barley stocks, with a smaller 2024 Canadian barley crop (13% below the five-year average).
“A tighter scenario [is] shaping up in terms of overall supply in our barley market,” Jubinville stated, further highlighting that strong Canadian barley exports, driven by competitive pricing against Russian, French, and Australian supplies, are contributing to the inventory drawdown. He anticipates barley exports to reach 2.5 million tonnes this year.
As a result, Alberta cattle feeders will likely turn to U.S. corn to replace barley in livestock feed. Jubinville predicts that Canada will need to import approximately two million tonnes of U.S. corn this year, with the bulk of that volume occurring in the second half of the marketing year. While corn imports have been relatively slow so far, he expects a significant increase in the coming months.
