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Corn: A Banner Year for Brazil
11.12.2019 10:21 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Grain: World Markets and Trade (December 2019), Brazil’s corn exports have been massive this year1. Cumulative exports from March to November totaled 33.3 million tons, more than doubling the amount for the average of 3 previous years. Export destinations have not been limited to traditional markets of Iran, Vietnam, and Egypt, but also expanded to Japan, the EU, and South Korea. While robust foreign demand, abundant supplies, and competitive prices have boosted exports, the depreciation of the real has further stimulated sales to the global market. Since April 2018, the value of the real has dropped about 20 percent against the dollar. Strong exports have drawn down stocks. Currently, ending stocks for the marketing year 2018/19 are expected at 5.0 million tons, the smallest since 2011/12. This would give little buffer to meet domestic needs in case of adverse events and constrain later sales. Moreover, prices have moved up reflecting the market situation. In Mato Grosso, the top-producing state, corn prices are about 50 percent higher at the end of November than a year ago. These strong prices are expected to boost area for the second-crop (safrinha) corn. The second-crop corn planting starts in January in the Center-West. Global import demand remains solid, while uncertainty continues for a few exporting countries. With a newly-elected government in Argentina, speculation is rampant over potential export policy changes. Unfavorable weather conditions in the United States disrupted planting and now harvest, though prices are becoming competitive. Prospects for Brazil’s corn appear bright in the short term, as evidenced by USDA’s forecast for record exports.
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