The US acknowledged the hit to its agricultural trade from stronger competition in export markets, hours before data showed another poor week for corn sales, and disappointing soybean demand.

The US Department of Agriculture cut its hopes for US export earnings from farming during fiscal 2012 by $5bn to $132bn, ditching hopes of the figure matching the $137bn notched up the year before.

The downgrade reflected a cut of more than 20%, to $8.2bn in hopes for wheat earnings, factoring in weaker prices and "intensified competition from Russia" which was, "limiting exports to key markets in North Africa and the Middle East".

"Additionally, ample exportable supplies of milling-quality wheat in both Canada and Australia are dampening export prospects."

'Stronger competition'

For corn, the forecast for export earnings was cut by 8.9% to $13.3bn "because of lower export volumes".

"Although import demand is up in key US markets such as China, Mexico, and South Korea, stronger competition from Argentina and Ukraine is limiting US exports," the USDA said.

"Record" supplies in South America were also blamed for a downgrade of 8.1% to $26.0bn in the estimate for oilseed exports in fiscal 2012, which closes at the end of September next year, with the USDA highlighting the "reduced early season competitiveness" of US supplies.

The data, which were partly offset for better hopes for meat shipments, follow persistent concerns over America's recent crop export record.

USDA data on Thursday showed US export sales for the week to last Thursday of both corn, at 352,000 tonnes including sales for 2012-13, and soybeans, at 490,000 tonnes, falling below market expectations.

Indeed, the corn number was termed a "big disappointment" by Darrell Holaday at broker Country Futures, who added that "there is certainly nothing wrong with domestic [corn] consumption levels, but exports are worse than tepid".

Wheat sales for the week were, at 503,000 tonnes, in line with traders' forecasts.

Farm profitability 

The reduced prices encouraged by increased export competition are also eroding hopes for farm profits, with the USDA earlier this week trimming by $2.5bn its forecast for net farm income this calendar year.

Nonetheless, at $100.9bn, the revised estimate still represents a jump of 28% from the 2010 figure, and a record high.

University of Illinois research calculates that growers' return prospects from next year's corn and soybean harvests have fallen by more than one-quarter over the last two months, to an average of $379 per hectare, thanks to the price falls.