Jan 07, 2010
Good Yields Could Leave Brazil With Large Supply Of Corn
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Even though Brazilian farmers reduced their full-season corn acreage, warm temperatures and well-distributed rainfall have left many farmers optimistic that they will produce a good corn crop in 2009-10. Parana is the number one corn producing state in Brazil and the corn crop in that state is rated as 95% good and only 5% average. Similar good crop conditions are being reported throughout the corn producing regions of Brazil. Most of the corn in southern Brazil is pollinating or filling grain and the soil moisture is adequate to saturated. In fact, the July through December rainfall in much of southern Brazil has been some of the highest on record.
According to Conab's December crop estimates, Brazil is expected produce 50.1 million tons of corn when combining both the first and second harvests. Combining the 2009-10 production with a carry over of 11.2 million tons (plus a few imports from mainly Paraguay), the total available corn supplies in 2010 should be more than 62 million tons.
Conab is estimating that the domestic demand for corn in 2009-10 will total 46.5 million tons and that Brazil will export 8 million tons of corn. If these estimates verify, then the carry over will decline to 7.8 million tons, but that is still 15% of the 2009-10 total production.
Domestic corn prices in Brazil have been depressed due to an abundant supply of corn and disappointing exports in 2009 and weak demand by the livestock industry. Livestock producers are expecting a better year in 2010 due to improved economies around the world and stronger domestic demand. According to AgraFNP, Brazilian poultry exports in 2010 should total US$ 5.9 billion, beef exports should total US$ 3.9 billion, and pork exports should total US$ 1.3 billion. The demand for Brazilian exports though is dependant on the strength of the Brazilian currency and the currency shows no signs of weakening, at least in the near term.