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July 6, 2016

Brazilian Soybean Exports Strong, Corn Exports Decline

According to data released from the National Association of Grain Exporters (Anec), Brazil exported 39.7 million tons of soybeans during the first six months of 2016, which was 17% more than during the first six months of 2015. Anec is estimating that Brazil will export a total of 57 million tons of soybeans in all of 2016, which if achieved, would be a new record.

The Brazilian Vegetable Oil Processor Association (Abiove) is not as optimistic concerning Brazil's soybean exports. They are currently estimating that Brazil will export 53.8 million tons of soybeans in 2016. Abiove reduced their estimate of soybean exports from earlier in the year due to lower estimates for the 2015/16 Brazilian soybean crop. In their June Crop Report, Conab estimated the 2015/16 Brazilian soybean crop at 95.6 million tons. Earlier in 2016, many estimates of the Brazilian soybean crop were over 100 million tons, but hot and dry weather in central and northeastern Brazil resulted in disappointing yields.

China has been the primary destination for Brazilian soybean exports in 2016 accounting for 76% of the soybean exports thus far. In second place is Spain at 3.7% followed by Holland at 3.5%.

Anec maintained their current estimate for the 2016 Brazilian corn exports at 23 million tons, but they conceded that the estimate might need to be lowered due to poor safrinha corn yields. The growing conditions for the safrinha corn crop have been very adverse in Mato Grosso, Goias, and Mato Grosso do Sul, which together account for three-quarters of Brazil's safrinha corn production. Last month, Anec lowered their estimate of Brazil's 2016 corn exports by 7 million tons. In 2015 Brazil exported a record of 30.75 million tons of corn.

In their June Crop Report, Conab reduced their estimate of the 2015/16 Brazilian corn crop to 76.2 million tons, which is 10% below last year's production. Conab may lower the corn estimate even more because the June estimate was released before freezing temperatures impacted the safrinha corn crop in Parana.

Brazil's corn exports are also expected to be down due to the high domestic corn prices in Brazil. A shortage of corn in the domestic market during April, May, and June resulted in record high domestic corn prices. Prices have subsequently declined due to harvest pressure. Mato Grosso is the largest safrinha corn producing state in Brazil and the corn crop in the state is approximately 26% harvested compared to 21% last year.

Domestic corn prices in Brazil are expected to rebound as soon as the harvest is complete and there are already reports that exporters are directing their sales to the domestic market due to the higher price.