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March 20, 2017

Brazil to Export Record Large Amounts of Soybeans and Corn

Brazil will be exporting a record large soybean crop in 2017 which has led to a lot of speculation if the infrastructure and ports will be able to handle the large volume of exports in a timely manner. The USDA is estimating that Brazil will export 61.0 million tons of soybeans and 31.0 million tons of corn in 2017.

Brazilian farmers continue to be slow sellers of their 2016/17 soybean crop and as a result, exporters are reporting difficulties in sourcing soybeans. This has resulted in fewer vessels in the lineup at Brazilian ports than what had been expected at this time of the year.

There have not been any significant problems with Brazil's early soybean exports other than the problems on highway BR-163 near the Amazon River. The problems along that highway generated a lot of press because of the amazing pictures of all the trucks stuck in the mud, but in the overall big picture, the problems on the highway were not very significant. Other ports in southern Brazil picked up the slack without any problems.

I don't foresee any logistical problems with Brazilian soybean exports during the first half of the export season, but there may be some problems during the second half. There is going to be a long tail to Brazil's soybean exports due to the slow farmer selling and a larger volume of soybean exports.

Brazil's soybean exports usually start to decline in August and September just as BrazilRs corn exports start to increase. Brazil is also expected to export a record large corn crop in 2017 as well. Therefore, there could be some problems ramping up the corn exports in August-September-October if there is still a large volume of soybeans to export.

If the two crops are trying to be exported at the same time, my guess is that soybeans may take precedent because the export pipeline will be filled with soybeans. The corn exports could be held back, at least temporarily, while the soybeans are cleared out.