Corn: international scenario favors Brazilian exports

Sep, 12, 2022 Posted by Gabriel Malheiros

Week 202237

The Pro Farmer expedition to key producing regions in the United States, which found a new production drop, proved that the global corn scenario is more encouraging for Brazilian exporters than initially thought. According to this latest assessment, the US is expected to produce 349.5 million tonnes in this 2022/23 crop, 15 million less than the volume predicted by USDA in August.

According to Flávio Roberto de França Júnior, grain coordinator at the consultancy Datagro, the newest prognosis comes as an additional factor to strengthen the claim that Brazilian maize exports will be around 40 million tonnes this year, close to the record 42.7 million set in 2019.

“There’s demand everywhere for multiple reasons, including the conflict in Ukraine, the drought in America and Europe, or because of geopolitical reasons putting pressure for sanctions against the Chinese,” said França to the Brazilian news agency Valor.

External sales are, indeed, more numerous in 2022, as was expected due to the crop failure that occurred last year.

“Unlike soybeans, which are highly demanded but have no supply [because of weather problems in the south of the country], there is enough corn available for exports. The current heated pace of exports shall last the whole year,” said him.

See below the track record of the volume of corn (HS 1005) exported by Brazil from January 2021 to July 2022. The data is from DataLiner.

Brazilian exports of Corn | Jan 2021 – Jul 22 | WTMT

Source: DataLiner (click here to request a demo)

Authorities from Brazil and China inked a sanitary agreement in early August, allowing the sale of Brazilian corn to the Asian country later this year rather than in 2023, as previously reported by the Ministry of Agriculture. As a result, Brazil will get access to a high-demand market. According to the USDA, China is likely to import 18 million tonnes during the 2022/23 harvest.

Paulo Molinari, an analyst at Safras & Mercado, is more cautious in his analysis. According to him, no large quantities will be shipped to China this year, perhaps not even in 2023.

“The agreed sanitary protocol for corn importation serves as a safeguard for the first ship that will depart with the cargo, ensuring that the commodity exported in Brazil is not contaminated when it reaches China. However, because they are only 30 days away from harvesting nearly 270 million tonnes, the Chinese are unlikely to buy immediately. Imports may be required only in the first half of 2023, following the end of Brazil’s export season,” he noted.

Nonetheless, the analyst anticipates strong demand for corn from Brazil through the end of the year, particularly from Europe, where the heat wave has harmed crops.

Source: Valor Econômico

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