Feb 20, 2020
Brazilian Exporters Confident about Grain Volumes in 2020
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The Brazilian National Association of Grain Exporters (Anec) estimated last week that Brazil will export 72 million tons of soybeans and 30-40 million tons of corn in 2020. The President of Anec acknowledges that there could be an impact from the coronavirus and the Phase 1 agreement between the United States and China, but he feels it will not have a major impact on soybean exports.
A big advantage for Brazil is the weaker currency that makes Brazil's exports very competitive in the world market. The Brazilian Real is trading at approximately 4.3 Reals to the U.S. Dollar, which is near its record low.
Brazilian soybean exports thus far in 2020 have been less than last year due mainly to a slower start to the Brazilian soybean harvest. Currently, about 30% of the Brazilian soybeans have been harvested compared to approximately 40% last year at this time.
In 2019, Brazil exported 41 million tons of corn, but corn exports in 2020 are expected to be in the range of 30-40 million tons. One of the reasons for the decline is the strong domestic demand for corn. Livestock producers in Brazil have seen a surge in meat exports especially to China and Brazil's livestock herds are expected to continue expanding in 2020, thus needing more corn.
Additionally, more ethanol in Brazil is being produced from corn instead of sugarcane. In 2019, 3.8% of Brazil's ethanol came from corn, which was more than a 100% increase compared to 2018. The amount of ethanol produced from corn will increase significantly in 2020 and in the years to come as more corn-based ethanol facilities come on line. There may be as much as 10 million tons of corn used to produce ethanol in Brazil in 2020.