Brazil Corn Export Projections Increase
- Brazil’s ag export association increased its projection of corn exports in December to 4.5 million tonnes from 2.9 million previously.
- Shipments would be the second highest on record for the month, above last year’s 4.2 million tonnes.
- Brazil exported 4.9 million tonnes of corn in November.
- Exports for the marketing year since March total 31.8 million tonnes versus 37.3 million last year.
- Brazil and China are reported to be in talks to increase corn trade between the two nations
- Brazil exported 42.7 million tonnes of corn worldwide last year, but only 68,000 tonnes were sold to China.
- USDA currently forecasts next year's corn production at 110 million tonnes and increased projected exports to 40 million tonnes.
FBN’s Take On What It Means: It will be difficult for Brazil to increase exports further before the next harvest this spring. Increased sales to China are not automatic as supplies need to meet phyto-sanitary conditions before they’re shipped, and Brazil’s domestic needs are expected to increase. Future sales will also depend on the eventual size of the new crop, which is currently expected to exceed last year, but is not off to an ideal start.
Russian Wheat Exports In Question
- Russia formally adopted a new tax of €25 ($30) a tonne on wheat exports from February 15 until the end of the marketing season June 30.
- Market activity was volatile after the announcement, but appears to be settling into a calmer state.
- So far there hasn’t been a sharp increase in export sales in an effort to beat the tax taking effect.
- In Egypt’s last tender, exporters were unable to pass along higher prices as supplies from Ukraine and Romania were more competitive.
- SovEcon has forecast Russian exports will decrease to 38-39 million tonnes compared to 41 million projected previously.
- Russia's state weather forecaster reported around 22% of winter wheat crops are in poor condition, the highest since 2013.
FBN’s Take On What It Means: Russian producers have been reluctant to make sales at lower prices, especially as they anticipate reduced new crop prospects. Exporters will likely be hesitant to make aggressive sales with concern about being able to originate the needed grain, and with supplies from others in the region still available. The new tax will probably provide support below the market as trade is reduced, but is not likely to drive prices higher.
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