BRAZIL CORN WATCH: Storage issues crop up as corn harvest accelerates

The second-corn crop harvest in Brazil continued to progress at a good pace, reaching 20.4% as of June 25, according to data from Conab, Brazil's national agricultural agency.

Farmers are running out of storage space in some parts of the country as the corn crop harvest is progressing amid expectations of a record corn crop in Brazil in 2021-22.

There are reports of a lack of available warehouses in some municipalities in Mato Grosso, forcing farmers to dump harvested corn in the open, which is raising concerns about the quality of the crop, IMEA, the Mato Grosso Institute of Agricultural Economics, said in a report.

Moreover, the corn harvest is expected to move faster this week, private consultancy AgRural said in a note.

Brazil's National Institute of Meteorology has indicated in its forecast that Brazil's Center-West region, which accounts for the bulk of the second-corn production, is unlikely to see any significant rains this week.

Corn prices are also falling with the increased crop supply in the country.

In Mato Grosso, corn prices fell to Real 61.22/60kg bag ($193.86/mt) June 27 from Real 71.07/60kg a week ago.

Meanwhile, the logistics cost to transport corn for domestic and export use continues to climb in Brazil. While increasing freight cost is typical for the season, the rise in global energy prices amid a bumper harvest has significantly driven up logistical costs.

The freight rate for transporting corn from Sorriso to Santos via road jumped to Real 478.25/mt for the week ended June 23 from Real 454.06/mt in the first week of June and Real 335/mt a year ago, IMEA data showed.

Conab forecasts Brazil's total corn production in the marketing year 2021-22 (February 2022-January 2023) at a record 115.22 million mt.

The first-corn crop in Brazil is planted September-December and harvested February-May, while the second crop is planted February-March and harvested June-July.