Brazilian Corn Prices Drop with Harvest

Brazil corn prices
This week’s U.S. Grains Council Chart of the Week illustrates that as Brazil’s summer corn harvest draws to an end, total corn production in Brazil has exceeded initial expectations, causing prices to drop.

This week’s U.S. Grains Council Chart of the Week illustrates that as Brazil’s summer corn harvest draws to an end, total corn production in Brazil has exceeded initial expectations, causing prices to drop. Production for the summer crop is nearly complete at 32.2 million metric tons (1.3 billion bushels), with 100 percent of the crop harvested in southern and central parts of the country. Total production estimates, including both the summer and winter crops, are now at 75 million tons (3 billion bushels).

Despite ample production, export volumes for shipments from July through September are considerably lower than previous years because of the higher initial price expectations. Because of the low sales volume at the beginning of the year coupled with larger-than-expected production, Brazil will have a surplus of corn in the coming months. Whether this surplus can make it to market quickly will depend on government subsidies and logistics.

Despite talk about the new northern corn shipping ports, little corn is being shipped from those areas. Ultimately, with strong corn production expected in the United States as well as in other exporting countries, import demand will be the factor that can change export volumes in Brazil for the rest of the year.