Tom Sleight, president and chief executive officer of the U.S. Grains Council, said in a phone interview with DTN that the Mexican senator's comments were more about getting attention than actually advancing legislation. Still, the U.S. Grains Council leaders are meeting this week in Panama and they have already heard about the Mexican senator's comments and proposal.

"We don't think the legislation is going to have much legs to it, but it's the kind of thing we are afraid will keep happening," Sleight said. "The bill is probably not going to go anywhere, but the tension and negative atmosphere is kind of unfortunate when Mexico became our No. 1 corn market this past year."

Despite political rhetoric, Sleight said most Mexican people in agricultural trade have been largely reserved about issues between Trump and Mexico. "Up until now, they have been playing their cards close to the vest.

Sleight is in Panama for the U.S. Grain Council's international marketing conference with partners specifically to focus on planning and market strategies for the next year. Industry experts dealing with Mexico have some growing angst about the situation.

"People are concerned about trade in general," Sleight said. "We're trying to judge different places around the world where there is this type of tension and we need to address it. Certainly Mexico is at the top of the list."

For the 2015-16 market year, Mexico bought 13.3 million metric tons of corn valued at $2.5 billion. Since the new marketing year began last September, the U.S. has shipped 5 million metric tons in corn to Mexico, or roughly $798 million. That's up 8% from a year ago.

DTN Senior Analyst Darin Newsom noted any effort to shut down U.S. corn exports to Mexico would have a ripple effect across the ag economy.

"We have an oversupply situation," Newsom said. "We can't have any threats to demand. Corn's the No. 1 agricultural market that we have. It's not just the grain market. It's all of the agricultural economy is tied back to corn."

U.S. corn farmers are looking at a 2.35 billion bushel carryover at the end of the marketing year, according to USDA. Any decline in exports could further inflate those figures.

Argentina farmers are projected to produce 36.5 million metric tons of corn, up 21% from a year ago. Brazil farmers are expected to produce 86.50 million metric tons, up 22.5% from last year.

"Argentina and Brazil are both going to have more corn to ship this year," Newsom said.

The situation could become more precarious if Congress and the Trump administration were to go ahead with a tariff -- a border adjustment tax -- that would disrupt U.S.-Mexico trade.

"Then South American corn would look much more affordable to Mexico," Newsom said.

Chris Clayton can be reached at chris.clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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