Jan 18, 2018

Brazilian Farmers Moving Old Crop Corn to make room for Soy

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

As farmers in Mato Grosso do Sul prepare to start harvesting their 2017/18 soybeans, they are also rushing to empty out their storage units of last year's corn crop to make room for the new soybean crop which they will start to harvest in about two weeks. In the state of Mato Grosso do Sul, it is estimated that there are still 1.7 million tons of corn in storage from the last corn crop, or about 17% of last year's production. In a typical year it would be less than one million tons of corn in storage at this time of the year.

Farmers in the state were holding their corn (and soybeans) waiting for better prices, but they couldn't wait any longer because they needed to free up some additional storage space. On January 9th, the average price of corn in the state was R$ 23.06 per sack (approximately $3.22 per bushel) which is down almost 15% from last year at this time when it was R$ 27.06 per sack (approximately $3.78 per bushel).

The situation is similar for soybeans with approximately 570,000 tons of old crop soybeans left to move in the state. They were waiting for a better soybean price as well and the soybean price has not fallen as much as the corn price. The average price of soybeans in the state on January 9th was R$ 63.50 (approximately $8.88 per bushel), which was down 2.3% compared to last year when a sack was selling for R$ 65.00 (approximately $9.09 per bushel).