May 19, 2014

Brazilian Corn Farmers are slow Sellers Exports Lag Last Year

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

During the first four months of 2014 the amount of corn exported from Brazil fell 35% compared to the same period in 2013. When the lower corn prices are factored in, the receipts from corn exports during the first third of the year fell 54% compared to 2013.

According to Safras e Mercado analysts Paulo Molinari, the rhythm of corn exports during the first four months of 2014 has been less than expected. He feels that many farmers in Brazil have been slow sellers of their corn because of the drought reduced full-season corn crop and the expectation of a smaller safrinha crop as well. With reduced Brazilian corn production and a reduction in corn acreage in the U.S., many Brazilian farmers are expecting improved corn prices going forward, thus the slow selling.

Domestic corn prices in Brazil have actually been higher than international prices, but they have been falling for the last three months. According to Cepa/Esalq, the price of corn at Campinas, Sao Paulo on March 14th was R$ 33.08 per sack of 60 kilograms (approximately US$ 6.83 per bushel). One month later, the price had fallen to R$ 30.81 per sack (approximately US$ 6.35 per bushel). Last Wednesday, May 14th, the price was R$ 28.45 per sack (approximately US$ 5.87 per bushel). While domestic corn prices are down, they still remain better than international corn prices.

Expectations for the safrinha corn crop in Brazil remain good, but the crop will not match up to the record corn crop produced in 2012/13. Conab is expecting a 75.2 million ton crop in 2013/14 compared to 81.5 million tons of corn produced in 2012/13.