RIO DE JANEIRO, BRAZIL – Corn is piling up outside Brazil’s silos as the country’s largest producing region harvests a super crop.
Warehouses are still full of soybeans, harvested only a few months before corn. In Mato Grosso state (MT), soybean production was also large this harvest, and sales were slower than normal, leaving warehouses without space to receive corn, according to Cleiton Gauer, superintendent of the Mato Grosso Institute of Agricultural Economics (IMEA).
While it is not uncommon for crops to be stored outdoors when internal capacity is exhausted, this was not seen on such a large scale for at least the past two years.
As the huge Mato Grosso corn harvest progresses, farmers and operators are facing a shortage of space.
The backlog threatens to put further pressure on corn and soybean prices, which are already falling on Chicago futures markets amid favorable weather in U.S. growing areas.
On Thursday, June 23, corn fell to the lowest level since before Russia’s military operation in Ukraine. Soybeans even fell to the lowest level since January.
On the other hand, the drop in futures markets offers hope that food inflation may moderate in the coming months, even with historically high prices.
At the end of May, about 11 million tons of soybeans in the state were still in the hands of farmers, down from 5.5 million a year earlier, according to Daniele Siqueira, an analyst at AgRural.
She said this month, soybean sales accelerated with a weaker Brazilian real (BRL), improving demand and pressure to get the oilseed out of warehouses.
Another reason for the lack of space is the speed of the harvest 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.
The state is expected to harvest 39 million tons of corn, a 20% increase over last year’s harvest. It corresponds to about a third of the Brazilian production, which can also reach a record of 115.2 million tons this harvest, according to Conab.
With information from Bloomberg