Argentina takes over Brazil’s share in the corn market, says analyst

Brazilian corn exports stand sluggish in 2024, stated Safras & Mercado analyst and consultant Paulo Molinari during a lecture at the 7th Safras Agri Week held on March 27. According to Molinari, Argentina is gaining ground in the corn export market, competing aggressively and reducing the international demand for Brazilian commodities.

“Given the current scenario, Brazilian corn exports may be limited to approximately 1.5 million tonnes in the first half of the year, a significant drop from the nearly 6 million tonnes exported the previous year,” he says.

The following chart shows the twenty-foot container equivalent volume of Argentina’s corn exports (hs 84) between Jan 2022 and Jan 2024. The data is from DataLiner.

Corn Exports from Argentina | Jan 2022 – Jan 2024 | TEU

Source: DataLiner (click here to request a demo)

According to Molinari, the exchange rate fluctuates between R$4.80 and R$5.20 per dollar, but if it falls below R$4.90 this year, farmers should seize this opportunity to buy inputs and fertilizers for 2025.

Climate change is causing the La Niña phenomenon to be perceptible in the spring, potentially leading to delays in rainfall and market speculation.

Conversely, the outlook is for normal weather for corn planting between May and June in the United States.

For the summer, the trend is also for normal weather in major producing states such as Iowa and Illinois, leaving no room for significant price volatility in the grain.

Molinari adds that even with the climatic instability faced by Americans last year, the corn harvest still produced record-breaking yields.

The consultant emphasizes that throughout 2024, the corn environment is not bullish from the producer’s point of view, both in Brazil and on the international stage.

He states that recent rains have been good for the second corn crop in Matopiba, much of Mato Grosso, Goiás, São Paulo, and Minas Gerais. Only in the Rondonópolis region, in the south-central part of Mato Grosso do Sul, and in the northwest of Paraná, have crops not received good rains in the last 30 days. In the others, the overall situation is good for the second crop.

Molinari informs that Brazil is expected to start harvesting the second corn crop early, in May and June, rather than from July to September, as in previous years, which relieves climatic pressure on the crops. Thus, Brazil will need to export at least 45 million tons of corn this year, without supply problems, even if it harvests a smaller crop than a year prior, estimated by Safras & Mercado at almost 126 million tons.

In the international price scenario, Molinari indicates that the Chicago Board of Trade will now be guided by the size of the crop in the United States and by fluctuations in oil prices, with the continuation of the war in Ukraine, which affects the Black Sea region.

He highlights that prices in Chicago are closer to the normal average of $3.80 and may reach even lower levels, depending on the size of the American crop.

The bias is for a reduction in corn acreage from 94.6 million acres to 92 million acres, taking into account the sentiment of producers. This decrease considers the more favorable exchange rate for soybeans in the country at this time compared to corn.

“If the area of corn in the United States falls well below 91 million acres, there may be some support for prices. Otherwise, the scenario will still be bearish for quotations,” he concludes.

Source: Canal Rural

Click here to read the original news report: https://www.canalrural.com.br/agricultura/argentina-toma-mercado-do-brasil-na-exportacao-de-milho-afirma-analista/

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