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April 4, 2013

Mato Grosso Farmers only Sold 20% of Anticipated Corn Crop

Farmers in Mato Grosso have planted a record large acreage of safrinha corn, but they have been very slow to forward contract their anticipated corn production. According to the Mato Grosso Institute of Agricultural Economics (Imea), farmers in the state have only sold 20% of their anticipated corn production compared to last year when 45% of the crop had already been sold by this date. The recent decline in international corn prices is expected to keep forward selling at a slow pace and in fact, many farmers have not sold any of their corn as yet

Another major concern for corn producers is the potential lack of storage space for the corn crop which will be harvested starting in June. The movement of soybeans out of the state has been slow due to congestion at the ports and long lines of trucks waiting to unload at grain terminals and port facilities. The soybeans are not moving out of the state at the pace that is needed to free up enough storage space for the anticipated record corn crop. The lack of forward selling could make the storage problem even worse because if producers don't sell the crop, they need to store the grain for longer periods of time.

With much of the storage still occupied with soybeans, grain elevator operators are expecting to store much of the corn in open-air piles while they work through logistical bottlenecks to get the record large grain production moved out of the state. Open-air storage does not carry a significant risk during the dry season because there is very little rainfall between June and August. The open-air poles need to be removed before the start of the rainy season in September or October.