World Grain Markets: South American Competition Limits U.S. Corn Exports

Combined corn exports for Brazil and Argentina are forecast at a record in 2015/16. In addition to large supplies, both countries have depreciating currencies, making their exports more competitive relative to other suppliers. Brazil’s exports are forecast at a record based on the robust pace of shipments as well as the expectation of another large crop.

Argentina’s exports are forecast to be the second-highest on record as sales and shipments have accelerated following the removal of export taxes and quotas. Exports are expected to remain strong, fueled by larger projected supplies this month. The bulk of Argentina’s 2015/16 exports are likely to ship during the latter half of the 2015/16 trade year (Oct-Sep).

Brazil’s exports have grown more than any other country in 2015/16, capturing a larger share of record global trade. To do so, Brazil has expanded its second crop, which is exported from July through December, a period which includes the U.S. harvest. This intensified competition presents a challenge for U.S. exports, as evidenced by the current slow pace of sales and shipments. Even though U.S. supplies are near record levels, export bids have remained above those for South American competitors.

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