Brazil Should Up Corn Exports for Better Prices

TF Agroeconômica says Brazil should sell more corn abroad and the goal is to add five million tons to the current 50 million tons forecast by Conab.

This aligns with what the USDA expects.

Brazil shipped 4.45 million tons from January to June. They sent another 9.25 million tons in August.

About 9 million tons will go out in September. To reach the USDA’s target of 55 million tons, Brazil must export 8.07 million tons each month until January 2024.

In the U.S., good weather helps the corn harvest. This floods the market and drops prices. Back in Brazil, there’s a lot of second-crop corn.

Most of it hasn’t been sold overseas. This keeps local factories well-stocked and pushes prices down.

Today’s corn prices are lower than last year’s. No big price jump seems likely soon. Conab’s recent report made this worse.

They added nearly two million tons to their end-of-season stock estimate. This makes buyers feel secure about a steady supply.

Background

For over fifty years, the United States held sway over the international corn market, exporting more of this essential commodity than any other nation.

Recently, Brazil surpassed the US in corn exports. This change could be permanent.

In 2023, the US accounted for 23% of global corn exports. Brazil’s share was nearly 32%, says the USDA.

Predictions for 2024 suggest Brazil will maintain its lead.

The US lost its top position in 2013 due to drought. But this is the first time it’s been second for two years straight.

The US has also lost its lead in soybean and wheat exports over the past decade.

Several factors contribute to this shift. These include rising domestic costs, land scarcity, and the impact of Trump’s trade war with China.

A strong US dollar and encouragement of domestic corn use for ethanol production also play a role.

Brazil, on the other hand, benefits from a weaker currency.

This makes its corn exports more competitive. It also has two corn harvests each year, compared to the US’s one.

Despite US corn sector improvements, Brazil will likely remain the global corn market leader.

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