New Delhi — US corn exports are set to increase in coming weeks as a reversal in export price differentials and the waning availability of corn in Brazil and Argentina make US supply more competitive, market sources said Friday.

Both Brazil and Argentina have been exporting corn at a record pace this year following a bumper harvest. This ample supply has also been cheaper than US corn for most of the year, severely crimping US corn's competitiveness in the global market, sources said.

The US' total commitments -- cumulative exports plus outstanding sales -- since the 2019-20 marketing year began September 1 are down 47% year on year at 12.475 million mt, and 40% below the five-year average, according to data from the US Department of Agriculture.

A delay in the US harvest has further slowed down its exports.

However, US corn export may see some pick up in the near term as it price is growing more competitive against Brazilian corn.

US corn FOB prices hit $171/mt Tuesday, $4/mt cheaper than Brazil corn for the first time since at least mid-March.

The US Department of Agriculture Tuesday reported the sale of 191,000 mt of corn from the US to unknown destinations for delivery in 2019-20, after reporting the export sale of 132,000 mt on Monday.

US corn FOB prices remained $4/mt below Brazilian corn on Wednesday, and the USDA reported another sale of 106,000 mt of corn to unknown destinations on Thursday.

The price difference between US CIF New Orleans corn for December shipment and Brazil corn FOB Santos for January loading has also widened. The US CIF New Orleans corn for December shipment stood at $171.05/mt Thursday, while Brazil corn FOB Santos for January loading was $178.73/mt, according to S&P Global Platts data. The US-Brazil corn price differential at currently around minus $8/mt has swung from plus $12/mt in July.

"Now that Brazil internal corn prices are rising, it is likely exports will slow as demand shifts to local consumption," said Futures International commodity analyst Terry Reilly Senior.

The basic price of corn -- the difference between spot and futures prices -- has shot up to 75 cents/bushel from 40 c/bu three months ago.

The Brazilian FOB Santos corn market for January loading was supported by feeders in the domestic market payinga premium to keep the corn inland. Feeders were able to pay higher as meat prices were at historical highs and production margins were good, Platts reported Tuesday.

"Exporters' bids at the port are around Brazilian Real 40 per 60 kg bags. Same price [was] paid by feeders at the north of the state [more than 500 km from the port]," a domestic broker said.

Recent robust corn exports from Brazil and Argentina were also likely to slow down amid dwindling supplies.

Brazil exported 32.95 million mt of corn over February 1-November 15, outpacing the 23.82 million mt exported over the entire previous marketing year, according to the trade department of Brazil. Data from a private shipping company showed 4.86 million mt of corn was lined up last week for export in November at Brazilian ports.

In the current crop marketing year that started in March to October, Argentina exported 28.9 million mt of corn, up 66.4% year on year.

Global corn demand appears to be relatively resilient in the face of African Swine Fever, due in part to the expansion of meat alternatives to pork, an analyst with a prominent commodity trading company said.

"The Black Sea will be trying to market its crop on the world market as long as weather conditions allow ports to function. Otherwise, the US should see a pickup in demand," the analyst said.

-- Mugunthan Kesavan, mugunthan.kesavan@spglobal.com

-- Shikha Singh, shikha.singh1@spglobal.com

-- Edited by Wendy Wells, wendy.wells@spglobal.com