Brazil to benefit from reduced US corn crop

Due to flooding in the US Corn Belt, Brazil closed negotiations to export 300,000 tonnes of corn in just two weeks.

 

Furthermore, Brazilian traders were able to sell corn at a much higher price from US$250 to US$300 a tonne.

 

Market analysts said that major importing countries would have to rely on Brazil more to buy corn.

 

The initial forecast of 11.5 million tonnes shipped by Brazil this year will likely be surpassed, observers said.

 

Paulo Molinari of agribusiness consultant Safras & Mercado, said when importers see that the US is going to have a significantly reduced harvest, they will start looking for a second option, which in this case is Brazil.

 

Since the start of 2008 through May, Brazil shipped 2.57 million tonnes of corn, which is 8 percent more than last year.

 

In May alone, a total of 693,700 tonnes were shipped by Brazil.

 

Céleres partner Leonardo Sologuren said that from this point forward, the trend is for new contracts and shipments to take off.

 

Sologuren said the three principal corn exporters are the US, Argentina and Brazil, which account for 85 percent of the global market.

 

Despite the decline in the US corn crop, Brazil should not surpass the volume shipped by Argentina which has so far reached 16 million tonnes, Sologuren added.