By Kellen Severo
Brazil is expected to become the world’s largest corn exporter and oust the United States from first place in 2023, says consulting company AgRural.
The company reveals that the expectation of grain export this year is between 46 and 47 million tonnes.
However, this scenario is conditioned to a variable: the weather.
According to the company, states like Paraná and Mato Grosso do Sul will sow a significant part of the crop outside the ideal window, possibly reducing crop productivity.
Check out the interview with AgRural’s market analyst, Daniele Siqueira:
WILL BRAZIL BECOME THE FIRST CORN EXPORTER IN THE WORLD IN 2023?
Brazil should be the leading exporter of corn in 2023, ahead of the United States, but more due to a conjunctural factor.
The United States has been exporting very slowly, with uncompetitive prices due to a question from the producers, who held on to the corn and left it to be sold later.
So, corn prices became high, and Brazil exported even more corn than it should have in the last months of 2022 and the beginning of 2023.
And then we will start exporting strongly again only in July when the ‘safrinha’ harvest starts.
So, if the harvest season is complete, we have a good chance of being the biggest corn exporter in the world, ahead of the US this season.
But it depends on how much we will harvest in the off-season.
IF WE ARE THE FIRST WORLD EXPORTER OF CORN THIS YEAR, DOES IT MEAN BRAZIL WILL BE IN THIS POSITION NEXT FEW YEARS?
Not necessarily.
Brazil was already the biggest corn exporter in the world in the 12/13 season when the US had a big crop failure.
So, it was also a conjunctural moment in which Brazil occupied this position, and then the US returned to occupy this space.
In the coming years, I believe that we will have a dance of the chairs between Brazil and the US in this first position.
Brazil will end up consolidating itself as the first exporter.
Still, it will not be like this immediately because now, in 2023, it is more a conjunctural issue that makes Brazil export more than a significant advance to remove the United States once and for all from this position of the biggest exporter.
WHAT IS THE FORECAST FOR CORN PRODUCTION IN BRAZIL?
Our production estimate for the 2023 harvest in Brazil is 96 million tonnes.
It would be a record production, but this projection is based, for the time being, on a trend line of productivity, not yet based on the development conditions of the crop.
We will start to do this in April.
So, planting has been delayed, especially in Mato Grosso do Sul and Paraná, specifically in western Paraná.
This delay often causes this line to lose productive potential due to climate problems further ahead.
We will be able to evaluate this later.
It is not an automatic condition of crop failure, planting outside the window, but it is not an ideal start.
For now, a record harvest is made based on a trend line, but it will depend on the weather in the coming months until the definition of the harvest.
WHAT IS THE PICTURE OF THE ‘SAFRINHA’ PLANTING IN BRAZIL?
We have a planting practically finished in Mato Grosso; it was done a little after the window, but nothing serious.
But we still have a considerable delay in Mato Grosso do Sul and a significant delay in Paraná.
Mato Grosso do Sul is the state that worries us the most because it has a window until March 10, or 15, depending on the region. Still, it will end up planting an area considerably more extensive than usual after the window, which worries us.
WHAT IS THE FORECAST FOR EXPORTS IN TODAY’S SCENARIO?
If we have a complete harvest, Brazil may export more in the calendar year 2023 than in 2022, which was 43 million tonnes.
It can reach 46 or 47 million tonnes, depending on some factors, but it would be a record export.
Let’s look at the USDA expectation, which estimates the harvest year from March to February. It works with 50 million tonnes, which is also possible within the calendar.
But as I said, it will depend on our ‘safrinha’ size.
WILL CHINA BE THE MAIN DESTINATION FOR BRAZILIAN CORN IN 2023?
This is a question that many people are asking right now.
I was at an event in Singapore last week, and there was a lot of discussion about how much Brazil would export to China.
But before that question, the main question is how much China will need to import corn in total in 2023, which is not much.
China is self-sufficient in corn; it imports more for stock rotation for quality reasons.
So, it imports up to 15 million to 20 million tonnes per year, but nothing compared to soybean, which imports about 10 million tonnes.
China will gradually gain space in the Brazilian corn market because it has a strategy of diversifying its origins.
Today, it buys basically from the US and Ukraine.
Ukraine has war issues and is a geopolitically tense region.
With the US, there is the tense issue, but there is another aspect that is not exactly a real war, but it is, in a way, an economic war between the US and China.
So, China turns to Brazil.
But an explosion of corn sales will not happen in the short term, so we will have the same scenario in Brazil as we have with soybeans.
China will be an essential buyer but not as crucial as soybeans, remembering that China buys 70% of all the soybeans that Brazil exports.
About the volumes, it will depend more on China than on Brazil.
If China is willing to buy, we will sell as much as they want, and the other buyers will have to buy corn elsewhere.
But even though Brazil is exporting a lot of corn and breaking export records, the world demand is not that heated.
What happened mainly in 2022 and early 2023 is that there was a chair dance among the leading exporters in the world, which are the USA, Brazil, Argentina, and Ukraine.
These other three exporters, for many reasons, reduced their exports, and Brazil took this space of exporters.
If we add up the exports of the four countries, they are practically equal to those of 2021 and 2022.
That is why I said that it is a conjunctural event that makes Brazil the largest corn exporter, but it is not that demand is strong.
Corn in dollars is very expensive. Corn at US$6 or US$7 per bushel in Chicago is very expensive, especially for Asian consumers, except for China, Japan, and Korea.
Many countries have difficulty buying such expensive corn, so we even went through a consumption rationing.
It is necessary to clarify that we are exporting a lot, but it is not due to strong world demand.
WHAT SHOULD THE BRAZILIAN FARMER HAVE AS AN AVERAGE PRICE FOR 2023?
We have seen solid Brazilian exports, and higher prices were expected.
But if we look at the prices in the last six months, they are practically sideways here in Brazil.
We may see an improvement if there is a safrinha (dry crop) failure, but we don’t want that to happen.
But there will be a more significant crop in the US, so it is complicated to bet on much higher prices if their yield is total.
With information from Jovem Pan