Jul 19, 2022
Brazilian Farmers are Slow Sellers of Their Crops
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazilian farmers have been slow sellers of their 2021/22 soybean crop as well as their 2021/22 safrinha corn and their anticipated 2022/23 soybean production, which they will start planting in September.
According to Flavio Roberto de Franca Junior of the consulting firm Datagro, as of July 8, Brazilian farmers had sold 76.7% of their 2021/22 soybean crop compared to 80.2% last year and 78.8% average. This represents an advance of 6.8% for the month.
For the 2021/22 safrinha corn that is currently being harvested, farmers had sold 43.4% of their corn as of July 8 compared to 65.4% last year and 58.7% average. This represents an advance of 4.8% for the month.
Forward contracting for the next soybean crop in Brazil has also been slow. Brazilian farmers have forward contracted 13.4% of their anticipated 2022/23 soybean production compared to 19.2% last year, 36.2% in 2020 and 18.7% average, according to Datagro. This represents an advance of 1.7% for the month. The forward sales in Mato Grosso are 26.3%, 29% in Bahia, 16.6% in Mato Grosso do Sul, and 9% in Goias.
The slow selling of the 2021/22 soybean production has left a lot of grain silos still full, which is complicating the storage of the safrinha corn crop. The storage situation is being made even worse by the rapid pace of the safrinha corn harvest in Mato Grosso.
According to Aprosoja/MT, Mato Grosso produced approximately 39 million tons each of both soybeans and corn in 2021/22, but the state only has storage capacity for half that amount. The combination of slow soybean sales and a rapid corn harvest has resulted in a lot of corn being stored in open-air piles. The quality of the corn in the open-air piles can be maintained if done correctly. If not, the corn can lose some of its weight by over drying and be exposed to insect damage.
Aprosoja/MT feels the answer to this problem is for farmers to build more on-farm storage. To help achieve that goal, Aprosoja is working to reduce the bureaucracy surrounding lines of credit to construct on-farm grain storage, which they feel would quickly pay for itself.
Brazilian corn exports to China to start in 2023 - Brazil will only be allowed to export corn to China starting with the 2022/23 summer corn crop onwards. The Agricultural Ministry of China indicated that sanitary agreements and protocols need to be in place during the corn growing season to monitor weeds and diseases. Those protocols were not in place for the corn that is currently being harvested, but they will be in place starting with the 2022/23 summer corn crop which farmers will start planting later in August.