U.S. Crop Exporters Shift Trade Flows as Drought Hits Harvests

(Bloomberg) -- Two rare U.S. crop export sales are showing how drought is altering global trade routes.

American exporters sold 355,100 metric tons of corn to northern neighbor Canada last week while 311,400 tons of U.S. soybeans were sold to Germany in the biggest transaction since 2002, U.S. Department of Agriculture data showed Friday. 

The deals come as arid conditions shrank grain and oilseeds harvests in Canada and the European Union, sending prices soaring and providing opportunities for traders.

“For the most part this is arbitrage,” Neil Townsend, chief market analyst at FarmLink in Winnipeg, Manitoba, said in an email. “There are sky-high feed grain prices in Western Canada. The drought limited production and feeders are looking for grain.”

©2021 Bloomberg L.P.