July 12, 2016

Lower Safrinha Production Results in Lower Brazilian Corn Exports

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The safrinha corn crop is the crop that Brazil exports and if the safrinha crop is smaller, than it follows that the corn exports will be smaller as well. In last week's report, Conab reduced their estimate of Brazilian corn exports from 25.4 million tons in June to 22.0 million tons in July. In their commentary they stated that some exporters will not be able to obtain enough corn to fulfill their export contracts and that other exporters will wash-out their export contracts in favor of selling to the domestic market where prices are higher (see next article). Last year, Brazil exported 30.2 million tons of corn.

In the June WASDE report, the USDA lowered the Brazilian corn exports by 3.5 million tons to 22.5 million and they are expected to lower it again in the July WASDE. Brazil's corn export commitments are running below last year and they are expected to decline further in the weeks ahead. It is possible that Brazil's corn exports could end up below 20 million tons, which would be at least 10 million tons less than last year.

Brazil's corn exports usually peak in November, but it is possible that the peak of the corn exports will come earlier this year, maybe in October, and they are expected to decline quickly due to a lack of available supplies. There will not be a repeat of last year when Brazil was still exporting record amounts of corn in January and February of 2016.