In the 2011/12 marketing year, Brazil shipped nearly 14.0 million tons of corn, while Argentina exported 12.0 million tons, according to recent data released by the Brazilian government.
With the U.S. drought last year leaving room for other corn exporting players, Brazil is taking advantage of the opportunity. Yes, the U.S. drought has been a major factor that has allowed for more Brazilian corn exports. But, other events are supporting the change of this South America country's corn market, according to Fabio Meneghin, Agroconsult analyst.
Unlike in the U.S. and Argentina, Brazilian farmers have the luxury of planting two corn crops per year. In 2012, Brazil's 'safrinha', or second corn crop, was ramped up to record levels.
In 2012, Brazil produced 39.0 million tons of corn with its 'safrinha' crop vs. 21.6 million in 2011.
The two 2012 corn crops combined are estimated at 71.4 million tons, according to the Brazilian government.
“In January, February, and even in March, southern Brazil had pretty bad weather. However, the July winter weather proved favorable for crop production in three states (Rio Grande do Sul, Santa Catarina, and Paraná). Therefore, it gave Brazil the opportunity to supply world buyers with corn at a lower price than the U.S. and other countries. "We set a 'safrinha' corn production record," explained Meneghin.
The 2012 profitability in Brazil has also set a record. Corn prices reached nearly US$ 30 on average for the bushel, while the total corn sales were approximately US$ 2.66 billion, which is up 101.5 percent compared to the previous year, according to a press release from the Brazil's Ministry of Agriculture.
In terms of area of planted corn in 2013, Meneghin predicts that the safrinha would decrease just one percent to 17 million acres. “A rebound would happen this year in Argentina with good weather. Prices would also increase because of currency demand. In Brazil, soybeans will still be a big bet," projects Meneghin. Agroconsult predicts a an increase to 22 million tons of total corn production.
Looking ahead, Brazil is expecting its 2013 corn area to be increased in the Center-Western part of the country and in the southern state of Paraná.
