Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Agriculture

Brazil's corn exports jump on early harvest, bumper crop, competitive prices

Electricity | Electric Power | Electric Power Risk | Renewables

US power sector faces challenges from lower utility load, global trade uncertainty

Agriculture | Biofuels

Platts Biofuels Alert

Commodities | Agriculture | Biofuels | Sugar

Miami Sugar Conference, 6th Annual

Commodities | Agriculture | LNG | Oil | Crude Oil | Petrochemicals | Shipping

US to raise tariffs on $550 billion of Chinese imports by 5 percentage points: Trump

Brazil's corn exports jump on early harvest, bumper crop, competitive prices

New Delhi — Brazil, the world's second largest corn producer and exporter after the US, is stepping up its exports rapidly this year amid a bumper domestic crop and expectation of a fall in the US corn production.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The South American nation exported 2.4 million mt of corn in May-June this year, which is significantly higher than an average export of 343,415 mt during the same period over the last six years, according to the official data.

Corn exports from Brazil are usually the lowest in May-June period. However, the amount of corn exported in these two months this year indicates that buyers are actively pursuing this alternate market.

Apart from record production, an early harvest, and higher prices of the coarse grain in the US are also seen pushing exports from the South American country above its usual pace.

Vietnam, Japan, and South Korea were among the major buyers of Brazilian corn during this period, data from the country's foreign trade ministry showed.

According to Brazil's national agricultural agency Companhia Nacional de Abastecimento, or, Conab, the South American country is likely to produce a record 98.5 million mt of corn in 2018-19, but even if one takes the bigger production into account, Brazil's corn exports in the last two months are considerably higher.

When Brazil's corn production was at the previous high of 97.8 million mt in 2016-17, corn exports were at 873,200 mt in May-June period of 2017.

Brazil's local marketing year 2018-19 as defined by the US Department of Agriculture started in March 2019 and will end in February 2020.

Besides, in the first two weeks of July, corn exports have already touched 1.88 million mt, while the same in the entire month of July 2018 were at 1.2 million mt.

"The US simply will not have enough corn to meet USDA's anticipated export target if the crop is as short as we believe it to be. That necessitates that buyers seek alternative supplies from Argentina, Brazil and Ukraine," said Arlan Suderman, Chief Commodities Economist with INTL FCStone Financial said.

The US is likely to produce 352.44 million mt of corn in 2019-20, compared to 366.29 million mt in 2018-19, according to latest data from USDA World Agriculture Supply and Demand Estimates.

Moreover, USDA's data shows that world stocks minus China and the US will fall to just 37 days of supply in 2019-20, "which is tighter than we were earlier in this decade when we posted record prices," Suderman said.

EARLY HARVEST IN BRAZIL

Another factor behind the surge in Brazil exports is the early harvest of corn. As a result of which, plenty of corn is available in the market.

The safrinha, or the second corn crop in Brazil is normally planted between February-March after the soybean harvest and the harvest starts between July and August.

But early soybean harvest this year encouraged farmers to plant safrinha corn at a record pace, several weeks earlier than normal and well within the ideal planting window.

"The main reason (for high exports) is related to the early harvest of the second crop corn - just to put into a perspective Mato Grosso and Parana started their harvest period in May, reaching 3.5% and 3% of harvested areas, respectively - usually, it starts in June," said Victor Ikeda, senior analyst of Rabobank Brazil. This resulted in an available volume of corn for exports earlier than in the last season, he added.

PRICE COMPETITIVENESS

Competitive prices of corn in Brazil are also supporting higher exports of the coarse grain, market participants said.

According to Suderman, the primary reason Brazilian shipments have been so robust this year is high price of US corn.

Planting problem in the US Midwest priced corn from the country above South American offers, he said.

The corn growing regions of the US were hit by inclement weather during the peak planting season.

"The US corn industry anticipates a short crop this year that will fall short of anticipated demand in the 2019-2020 marketing year," Suderman said.

Related story: US total corn net export sales fall 16% on week to 333,006 mt

According to Rabobank's analyst, Ikeda, the export prices of Brazilian corn from the port of Parangua are 10% lower than that of the port of New Orleans in the US.

Record high production in Brazil and Argentina are also likely to keep global corn prices under pressure, according to market participants.

"The highest production in the Brazilian and Argentine histories has been the main reason which is capping an even strong upward trend in CBOT prices," Ikeda said.

He added that he is not expecting corn prices on the Chicago Board of Trade to reach $5 per bushel so far, given higher production in Argentina and Brazil may offset part of the US exports decline.

The front month September contract of corn on CBOT opened at $4.25/bu on Friday.

-- Shikha Singh, shikha.singh1@spglobal.com

-- Mugunthan Kesavan, mugunthan.kesavan@spglobal.com

-- Edited by Debiprasad Nayak, newsdesk@spglobal.com