South America Calling

Brazilian Corn Exports Strong in October

Brazilian corn exports continued to run strong in October as it places abundant supply and can be aggressive on price following a dramatic devaluation of the real.

Shipments totaled 5.0 million metric tons (mmt) last month, according to the Brazilian Cereal Exporters Association, which is 7.6% higher than September and 44% higher than October 2014.

In the first nine months of the 2015-16 season (Feb-Jan), Brazil has exported 20 mmt of corn, and with ship lineups full of corn for the next month, Brazil appears well on the way to exporting 30 mmt this season. That would smash the previous record of 26 mmt in 2013-14.

This export drive has taken large portions of Brazil’s record second crop off the market and caused domestic prices to soar to record levels in reals.

In Cascavel, western Parana, a 60-kilogram bag of corn was quoted at R$30.50 ($3.43 a bushel) Tuesday, some 30% higher than last year. That jump is all to do with the 33% fall of the real against the dollar in the same period.

Brazil produced 55 mmt of second-crop corn this year, out of total production of 85 mmt. Next year, the surge in prices will cause a jump in planting, and analysts say output could reach 60 mmt out of total production of around 88 mmt to 89 mmt.

Brazil is expected to have an end stock of around 8 mmt in January, with much in silo-bags across the fields of the center-west. The silo-bags really have been a game changer for second-crop corn, making farmers far less prone to forced sales due to the limited storage space at elevators.

(AG)

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