Brazil’s second corn crop of the year is being harvested now, and that crop can have a big impact on prices here in the U.S.
“The safrinha corn is 8% harvested, led by the state of Mato Grosso at 11%,” says Dr. Michael Cordonnier of Soybean & Corn Advisor, Inc. He adds that some areas of the country are experiencing wetter-than-normal conditions, but widespread damage to corn has not been reported.
“Yields are pretty darn good, maybe not a record, but very good, especially Mato Grosso, and harvesting has been kind of slowed due to the wet weather, but I do think the recent rain has helped the later maturing corn in southern Brazil.”
Cordonnier says including the Argentinian crop, South America has itself another healthy yield.
“The WASDE report last week, they made a big adjustment upward for South America corn. They increased Brazil corn at 3 million tons to 138 and increased Argentina corn 2 million to 50. Now they were behind in their estimates, so they played catch up last week, and raised the corn quite a bit in South America, and it was a good crop.”
Argentina’s early-season dryness raised concerns, but moisture conditions improved enough to support strong yields across many production areas.
This isn’t great news for U.S. producers as cheaper grain will now flood the market out of Brazil. Global buyers like China, Japan, and Mexico will naturally pivot to cheaper South American origins.
And as US export demand dries up, domestic supplies back up, forcing US cash and futures prices down to stay competitive, only adding to the economic difficulties farmers have already been facing.
Source: NAFB News Service
