GRAINS-Chicago corn futures hit new lows amid US-Mexico rail crossing closures

Credit: REUTERS/FLORENCE LO

By P.J. Huffstutter

CHICAGO, Dec 20 (Reuters) - Chicago front-months' corn contracts hit new lows on Wednesday after the U.S. government closed two key rail crossings into Mexico, the top importer of U.S. corn, in response to rising migrant crossings.

Business groups and railroad operators are urging authorities to reopen rail bridges in Eagle Pass and El Paso, which U.S. border authorities closed on Dec. 18 in order to "redirect personnel" to process migrants crossing the border.

In October, total rail freight between the El Paso and Eagle Pass ports topped $3 billion in both directions, according to the U.S. Department of Transportation. That accounted for some 4% of total trade across the U.S.-Mexico border that month.

The impact on exports is already being felt, National Grain and Feed Association said in a letter sent Wednesday to Homeland Security Secretary Alejandro Mayorkas.

"Unfortunately, the crossing closures are causing exports to be lost," the letter stated. "Each day the crossings are closed we estimate almost 1 million bushels of grain exports are potentially lost along with export potential for many other agricultural products."

The U.S. typically exports grains to Mexico - the top buyer of U.S. corn for the past three years - by rail, said Mike Zuzolo, president of Global Commodity Analytics.

"The market is responding to this, and I feel like I'm having to address supply chain issues that I thought were long gone after the pandemic was over," Zuzolo said.

Soybean futures also turned lower on Brazilian weather forecasts, while wheat slipped as analysts boosted Black Sea production estimates, traders said.

The Chicago Board of Trade (CBOT) most-active March corn CH24 and May CK24 futures set new contract lows. The most-active contract Cv1 settled down 2-3/4 cents at $4.82-1/2 a bushel.

The most-active soybean contract Sv1 settled down 4-1/4 cents to $13.08-1/4 a bushel, while wheat Wv1 closed down 12-3/4 cents at $6.10 a bushel.

(Additional reporting by Peter Hobson in Canberra and Sybille de La Hamaide in Paris; Editing by Rashmi Aich, Sonia Cheema, Shweta Agarwal, David Gregorio and Cynthia Osterman)

((peter.hobson@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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