Jul 06, 2021
Brazil's Corn Exports in July Could Fall 50%
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
July is usually the month when Brazil starts to ramp up its corn exports, but Brazil's corn exports this July are expected to fall far short of original expectations. Brazil was expected to export about 33 million tons of corn in 2021 with almost all the exports coming from the safrinha corn crop. Unfortunately, the safrinha corn was planted much later than normal and it then endured a historic drought and last week it was hit by three consecutive nights of freezing temperatures.
The final safrinha corn production will not be fully known until the crop is harvested, but it is guaranteed to be much lower than originally anticipated. As a result, Brazil's corn exports in 2021 may end up closer to 20 million tons.
Trade sources in Brazil are reporting many "washouts" as exporters prefer selling to the domestic market where prices are higher. The corn that will be exported in July is from previous contracts, but going forward, traders would rather sell to the domestic market, thus the export "washouts."
According to the maritime agency Cargonave, there are 39 vessels scheduled to load corn at Brazilian ports during the month of July compared to 85 vessels in July of 2020. Brazil may export 2.5 million tons of corn during July compared to 5 million tons in July of 2020 according to data from the Brazilian National Cereal Exporters Association (Anec). Brazil will export corn during July, August, and September, but after that, corn exports are expected to diminish significantly.
Domestic corn prices are expected to remain very strong in Brazil at least through the end of the year. This should encourage Brazilian farmers to significantly increase their acreage for the 2021/22 safrinha corn crop.