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August 3, 2015

Brazil Corn Exports could Set New Record in 2015

In addition to being the second largest soybean producer in the world, Brazil is now becoming a major force in corn exports and well. In 2015, Brazil may export as much as 28 to 30 million tons of corn surpassing the old record of 26 million tons set in 2013. Various factors are contributing to the surge in corn exports including: increasing safrinha corn production, a strong U.S. dollar, a weak Brazilian real, political problems in Argentina, and hot and dry weather in Europe reducing corn yields in France and Germany.

According to the Export Secretary at the Ministry of Agriculture, thus far in 2015, Brazil has exported 3.0 million tons of corn. During the first 18 days of July corn exports totaled 0.93 million tons and at the current pace, corn exports during July could set a new record surpassing the previous record of 1.7 million tons set in 2012.

Now that soybean exports from Brazil are winding down, it is opening up more opportunities for corn exports from Brazilian ports. From February to August, Brazilian ports export almost exclusively soybeans and soybean meat, but from August to January corn takes over as the principal grain export. Most of the corn exported from Brazil is produced as safrinha production, which is planted after the first crop of soybeans are harvested. Safrinha corn is generally planted from January to March and harvested from June to August.

Safrinha corn production in Brazil has been very good in recent years and Conab is currently estimating that the safrinha corn crop will total 51.5 million tons, but state and private estimates are expecting an even larger production. The 2014-15 safrinha corn crop in Brazil will represent 63-65% of the total corn production in Brazil.

Brazilian farmers have taken advantage of the recent weakening of the Brazilian currency to market much of their corn production. In the state of Mato Grosso, farmers have sold approximately 70% of their anticipated corn production. In some areas of southern Goias, farmers have sold 80% of the crop with 65% sold in Mato Grosso do Sul and 50% sold in Parana.

Port officials have been very pleased with port operations during the peak of the soybean exports. Due to recent improvements, numerous ports in Brazil have set records for soybean exports and those improvements are expected to help corn exports as well.

Additionally, new port operations on the Amazon River and in northeastern Brazil are helping to expand Brazil's total port capacity. The new Tegram Grain Terminal at the Port of Itaqui in northeastern Brazil just loaded its first vessel with corn and by the end of 2015, the port is expecting to export 0.8 to 1.0 million tons of corn. These new ports in northern Brazil are offering a cheaper alternative for corn exports out of the state of Mato Grosso which is the largest corn producing state in Brazil.