Brazil’s low soybean exports cause corn storage concerns

A fall in port premiums has led Brazil’s soybean farmers to practically hoard their harvest, raising the fear of a storage shortage for the country’s coming winter corn. Soybean premiums started April at 40¢ per bushel down from US$1 per bushel a year ago and even in February 2019 farmers collected 70¢ per bushel. The premiums started to fall after Washington and Beijing decided to negotiate an end to the trade war that boosted Brazil’s soybean exports to China during 2018. This year farmers planted the winter corn earlier than usual in some regions so space for the harvest will be needed sooner than expected. According to a Reuters news story, in Rio Grande do Sul state there is “desperation” to find warehouse space at Rio Grande port.

Brazilian soy growers are also at the mercy of US and China negotiations, as well as the size of the US yield this season. The US has plenty of stock to spare following the trade war, especially when the two countries are trying their best to thrash out deals to end the trade spat. Brazilian grain exporters association, Anec, has already reduced its soybean export estimates to 67m tons down from 73m tons this season.

DatamarNews observed a similar trend from neighboring, Argentina. Soybean farmers are delaying futures contracts as they wait for more certainty regarding prices. The Buenos Aires Grains Exchange estimates Argentina’s soybean yield may exceed 53m tons this season.

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