Brazil set to produce record corn crop

Brazil’s corn exports are set to reach record highs this year, driven by two factors: an unprecedented delay in corn planting in the US, the world’s largest producer, and exporter, and Brazil’s high production during this period.

According to Conab – The National Supply Company – this year’s forecast was to export 31 million tons of corn, even before the problems of excessive rainfall faced by the US. But this figure is now set to increase. The amount of Brazilian corn exported during the last harvest reached 24.8 million tons.

“We began the harvest needing to export at least 30 million tons. Now exporting has become even more important given the large volume that we will harvest,” said Daniely Santos, a market analyst at Céleres, when commenting on estimates of historic Brazilian production levels of around 100 million tons.

Forecast for Historical Production Levels

Brazil’s rainy weather has boosted the corn crop’s yield, which was already expected to be high, with a good planting window after anticipated soybean harvest.

Last week, Agroconsult reported a 2 million ton increase in its forecast, to 100.4 million tons. “Although we expect an increase in local consumption due to the increase in animal protein production, the need to export is big, there will be plenty of corn to export. This scenario of large exportable surplus causes prices to move towards export parity,” said Itaú BBA senior agribusiness analyst Guilherme Bellotti.

“Previously, prices had a discount in relation to export parity, and now with this historical delay in US planting, contrary to expectations there will be a tightening in US supply,” he added.

Besides Brazil, other countries such as Argentina and Ukraine also have good crops and will compete in markets that the US fails to supply. Today, however, Brazilian corn is highly competitive.

The National Cereal Exporters Association (Anec) recently projected corn exports at 30 million tons for this year.

Source: Reuters

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