Brazil corn stored in the open air as warehouses are full of soybeans

Warehouses in Brazil are still full of soybeans, harvested just a few months before corn. In the state of Mato Grosso, soybean production was high this season. At the same time, sales are slower than usual, leaving warehouses with no space for corn in Brazil, according to Cleiton Gauer, superintendent of the Mato Grosso Institute of Agricultural Economics (IMEA).

While it is not uncommon for crops to be stored in the open air when indoor capacity is exhausted, this has not been seen on such a scale for at least two years. As Mato Grosso’s massive corn harvest progresses, farmers and operators face a lack of space.

The buildup threatens to put further pressure on corn and soybean prices, which are already falling in Chicago futures markets amid promising weather in US croplands. Corn prices fell on Thursday (June 23) to the lowest level seen since before Russia invaded Ukraine. Likewise, soybeans fell to the lowest level since January.

See below the comparison of corn shipments from Brazil in the first four months of the year in 2021 and 2022. The data below is from DataLiner.

Brazilian corn exports | January – April | 2021 – 2022 | WTMT

Source: DataLiner (click here to request a demo)

On the other hand, the decrease in futures markets offers hope that food inflation can recede in the coming months, even with historically high prices.

At the end of May, about 11 million tonnes of soybeans were still in the hands of farmers, up from 5.5 million a year earlier, according to Daniele Siqueira, an analyst at AgRural. This month, soybean sales picked up on a weaker real, improving demand and pressure to move the oilseed out of warehouses, she said.

See below how soybean shipments behaved in the first four months of 2019, 2020, 2021, and 2022. These data are from DataLiner by Datamar.

Soybean Exports from Brazil | Jan – Apr | 2019 – 2022 | WTMT

 Source: DataLiner (click here to request a demo)

Another reason for the lack of space is the pace of harvesting in Mato Grosso. As of June 17, it was 27% complete, up from 4% a year earlier and a five-year average of 14%, according to Imea. As a result, the state should harvest 39 million tonnes of corn, an increase of 20% compared to the previous crop. This corresponds to about a third of Brazilian production, which could reach a record 115.2 million in this harvest, according to Conab.

Source: Bloomberg Línea

To read the full original article, please go to: https://www.bloomberglinea.com.br/2022/06/24/milho-fica-a-ceu-aberto-no-brasil-com-armazens-cheios-de-soja/

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