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October 23, 2015

Brazil's Corn Exports Ramp up as Soybean Exports Wind Down

Brazilian soybean exports are winding down while Brazilian corn exports continue to ramp up. According to the Brazilian Export Secretary (Secex), during the first three weeks of October, the daily exports of corn from Brazil averaged 266,200 tons per day, compared to the month of September when they averaged 164,500 tons and in October of 2014 when they averaged 138,200 tons per day.

The lower price of Brazilian corn due to the devaluation of the Brazilian currency, coupled with a record large Brazilian corn crop, has led to increased demand for Brazilian corn. That can be seen in the number of vessels in Brazil waiting to load corn. At the end of last week, there were an estimated 39 vessels waiting to load corn at the Port of Paranagua compared to no vessels waiting to load corn at the same time last year.

Thus far this year, Brazil has exported 15.26 million tons of corn compared to 14.25 million tons at this point in 2014. Conab is estimating that Brazil will eventually export 28 million tons of corn by the time the corn exports wind down in mid-January. There are some concerns that Brazil will not be able to reach that goal if the forecast for heavy rains in southern Brazil over the next few months verifies. The loading of vessels at Brazil's two main ports of Santos and Paranagua is suspended during periods of rainfall. The heavy rains are believed to be due to the current strong El Nino in the Pacific Ocean.

As Brazil's corn exports are increasing, soybean exports out of Brazil are declining. During the first three weeks of October, Brazil's soybean exports have averaged 125,300 tons per day compared to 176,400 tons per day during the month of September and just 32,200 tons per day in October of 2014.

China is the number one importer of soybeans in the world and Brazil is the number one soybean exporter. During the month of September, China imported 5.1 million tons of soybeans from Brazil, which represented a 52% increase compared to September of 2014. Thus far this year, China has imported 33 million tons of Brazilian soybeans or 15% more than in 2014. China's soybean imports from all sources during the month of September totaled 7.2 million tons which is 44% more than September of 2014. Year-to-date, China has imported 59.6 million tons of soybeans or an increase of 13% over last year.