Global Markets – Coarse Grain – Brazil’s Corn Exports Thrive

Abundant supplies and competitive prices combined with strong foreign demand have sharply boosted Brazil’s corn exports in 2018/19 (October-September) which completed the year with a new record of 39.0 million tons, well above the previous record of 35.4 million tons in 2015/16. Large supplies from the second crop (safrinha), which typically comes onto the market in August, have greatly boosted exports.

Meanwhile, crop uncertainty since May supported strong prices for U.S. corn and lowered U.S. competitiveness to Brazil’s benefit. While Brazil’s exports to all destinations have expanded this year, exports to traditional U.S. markets such as Mexico and Colombia have grown noticeably.

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Prospects for Brazil’s corn exports remain bright. The country has ample supplies as production has grown faster than domestic use. The relatively weak real could boost competitiveness of its corn and encourage producer selling.

Export terminals along the Amazon river and its tributaries (known as the Northern Arc) have expanded, shortening travel distance and lowering costs from farms in the Center-West to ports. In recent years, corn exports via ports along the river have increased, accounting for a third of exports.

In the coming year, tight exportable supplies in the United States could again strengthen Brazil’s exports.

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