Brazil growth hitting US corn production – USDA

Brazil’s share of the world corn trade more than doubled in the 2012-2013 season, jumping to 25.9 percent of global trade from just 12.2 percent the previous year, partly due to a drought that affected US corn production.

The USDA predicts in a report Brazil will remain the world’s second largest corn producer over the next decade, behind only the United States, with its share of global trade growing slightly.

Source: USDA.

US producers are already feeling the effects of Brazil’s sevenfold increase in production since 2015, as shown by the seasonal trends for US corn.

Most of Brazil’s increased corn for export comes from double-cropping in the Mato Grosso region, where land is replanted with corn immediately following the soybean harvest, leading to a surge exports between September and January. As a result, in the last two years US corn exports have fallen off in these months, with exports falling to between 6 percent and 7 percent of yearly totals in 2014 and 2015. Monthly exports in April and May exceeded 10 percent of annual totals.

This trend could see an increase in exports between February and April for US corn growers, and a shift toward soy production in order to take advantage of drop-offs in Brazilian soy exports, as the market shifts toward corn, the report finds.

Improvements to Brazil’s export infrastructure could reduce seasonal fluctations. Soybean exports generally receive priority in Brazil’s crowded ports during the months immediately after harvest. Corn, which is generally less valuable and cheaper to store, tends to be held until most of the soybean crop has reached the market.

Source: USDA.