History may be in the making now that USDA has raised its forecast for Brazilian corn exports to 50 million metric tons for the 2022-23 marketing year. That would push Brazil past the U.S., the long-established world leader in corn exports, which is expected to ship 48.9 million tons to foreign buyers.
With Brazil planting more and more corn as a second crop — Brazil’s “safrinha” — and a deal last year that the country struck with China to open up that massive market, corn, trade has been rising sharply.
USDA, in its monthly World Agricultural Supply and Demand Estimates report, left the forecast for U.S. corn exports unchanged, but raised its Brazilian forecast from the 47-million-ton prediction it made in January.
The ascendancy of Brazilian corn exports was expected, said Joana Colussi, a postdoctoral research associate at the University of Illinois.
“It is not a surprise,” she told Agri-Pulse. “It's just a matter of time. The pace of corn exports in January exceeded expectations in Brazil. In 2023, the potential of shipments to meet Chinese demand will range from 6 to 10 million tons. That way, Brazil can easily reach a total export of 50 million tons.”
Arlan Suderman, chief commodities economist for the StoneX Group, said he expects Brazilian corn production and exports to continue to climb.
“Brazil’s got the cheap land,” he said. “Brazil has the currency advantage and it has the capability to expand. When the world needs more supply, (the U.S.) can increase yields. Brazil can increase yields and area. Not many areas in the world can do that.”
Weather hampering exports in Argentina
Dry weather has been having an impact on Brazilian soybean farmers in the southernmost state of Rio Grande do Sul, but arid weather is taking a much bigger toll on Argentina. The USDA lowered its forecasts for Argentina’s corn and soybean production, dropping predictions even below private estimates.
USDA lowered its 2022-23 Argentine corn production forecast to 47 million tons, a roughly 15% drop from the 55 million predicted last month. And for soybeans, USDA lowered its forecast to just 41 million tons, down from the February prediction of 45.5 million.
“The drought in Argentina is very real,” said Suderman. “That’s what the market is focused on.”
The new WASDE forecasts show Argentine corn and soybean production about 1 million tons less than the market was anticipating Suderman said, stressing “that there’s probably more cuts coming.”
The reduced supply of Argentine corn will create new opportunities for Brazil, said Colussi.
“Another factor is the drought in Argentina which will reduce the amount of corn from South America in the market,” she said. “Brazil has this amount available.”
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