Surging shipping costs could allow US corn to become competitive into China, although Chinese interest levels will ultimately dictate whether purchases materialize.
Fob corn prices out of the US Gulf coast have been globally competitive for much of the 2025-26 marketing year, seldom exceeding $220/t. With competitive pricing, US exports have surged to 66.5mn metric tonnes (t) through 5 March of the 2025-26 marketing year, 16mn t ahead of the same week last year, according to US Department of Agriculture data.
But US corn sales to China have been close to zero since they reached 2.81mn t in the 2023-24 marketing year. The US sold just 33,000t of corn to China during 2024-25, and the US has yet to sell any corn to the country this marketing year as tariff barriers have reduced trade between the two.
That could change, though, as rising freight rates have put the Argus-assessed Santos Brazil to Qingdao dry grains rate above the Houston US to Qingdao rate for the first time since October 2022.
Both freight costs have surged since the start of March in the wake of the US-Iran war, but the Brazil-originated rate reached a $3.40/t premium to the US Gulf origin as of 11 March.
US rates had remained above Brazil's immediately after the start of the conflict, but higher bunker costs in Brazil have led to a larger overall increase to the Santos rate, flipping the spread between the two.
Global corn prices have also moved higher, increasing the attractiveness of US-origin corn to Chinese buyers. Brazilian corn sellers have raised offers since the start of the conflict, pulling the Argus-assessed July loaded fob Santos/Tubarao price up $4.72/t since the end of February. China's domestic sellers have also raised offers as slowing farmer sales — as well as potential quality concerns — have tightened supplies and increased buyers' interest in the international market.
Falling US barge rates and increased farmer selling have helped US prices fare better, with the Argus-assessed May loaded fob US Gulf price gaining just $2.26/t since the end of February.
Barriers to entry
Although US corn has become competitively priced, that may not be enough to draw Chinese purchasers back.
China's import tariff on in-quota US corn remains 11–10 percentage points higher than pre-2025 levels, even after tariff barriers between the two countries were lowered as part of a trade deal reached last fall.
The trade deal also did not include a requirement to purchase US corn, instead only obligating China to resume buying US soybeans, sorghum, and timber.
Chinese buyers must also operate under the country's tariff rate quota, which was set at 7.2mn t for corn imports this year. Of that volume, only 40pc is allocated to private purchasers, with the rest set for state-owned firms. That means private purchasers have to decide if filling their share of the 2.88mn t allotted to them is the right decision following the recent escalations in grain and freight prices.
In all, China's return to the US corn market is dependent on multiple factors, but competitive delivered prices against other major origins may prove to the be the first domino to fall.
