March 4, 2016
Record Corn Exports result in Strong Domestic Corn Prices in Brazil
Domestic corn prices in Brazil continue to be supported by very strong corn exports. The combination of record exports and lower full-season corn production has led to very strong domestic corn prices in Brazil. Earlier this week in Tangara da Serra, Mato Grosso, corn was selling for R$ 31 per sack and in Cascavel, Parana it was selling for R$ 33 per sack. Both of these are very good corn prices.
Domestic corn prices in Brazil are averaging about 60% higher than last year at this time. These strong corn prices are an incentive to plant safrinha corn in the two leading producing states of Mato Grosso and Parana. The planting window for safrinha corn is now reaching its limit and the safrinha corn acreage is expected to increase maybe by as much as 10% compared to last year. The last day for planting safrinha corn in Mato Grosso is approximately March 10th and in Parana it is approximately March 15th. The safrinha corn production is expected to be approximately two-thirds of Brazil's total corn crop.
The strong domestic prices are the result of a tight supply resulting from record large corn exports and declining full-season corn production. The Brazilian Export Secretary (Secex) reported that in February Brazil exported 5.3 million tons of corn or 282,900 tons per day. This was 27% more than the daily corn exports in January and a whopping 360% more than the daily corn exports in February of 2015. The strong exports are the result of a significant devaluation of the Brazilian currency which makes Brazilian corn very competitive in the international market.
Brazilian corn exports will decline dramatically during March as soybeans become the main exported commodity from Brazil. The current lineup of vessels at the Port of Santos does not contain any vessels waiting for corn. At the Port of Paranagua, each day the lineup contains less vessels waiting for corn.
As corn exports decline and more full-season corn is harvested, the domestic supply of corn will increase and corn prices should start to ease.