Archive for June, 2012

Brazil Corn Report: How Will It Affect U.S. Markets?

June 7, 2012

Though both the U.S. and Brazil have had agricultural experts forecast ample corn harvests this year, a recent report is making some question the security of America’s corn reserves.

Per a U.S. Grains Council report, Brazil’s summer crop harvest has matched its anticipated volume of 1.4 billion bushels and is expecting a 20 percent increase in corn planting. Additionally, a record 17.5 million acres are estimated for second-season corn (known as the safrinha), yielding another record-setting 1.1 billion bushels.

Like the U.S., Brazil experienced favorable planting weather and farmers had increased their acreage. But unlike the U.S., Brazil experienced decreased domestic usage and exported less, which “inundated Brazil with ample stocks.”

Brazil exports about 20 percent of its crop while America grows 40 percent of the corn sold for the world market.

Here in America, some analysts believe that the USDA has over-estimated the American corn supply and projections, leaving less of a carryout and a tighter supply.

While global competition is nothing new and projected crops are always difficult to predict, U.S. corn farmers have learned to take this information in stride. As we know, farm results are extremely variable and there is always supply uncertainty. It’s too complex and challenging to predict the future. If we receive a good rain, the U.S. will again deliver a robust crop to quell critics and drive market prices.

For now, it’s best to remain confident in America’s tradition of continually supplying an abundant corn crop and wait out the hype.

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