The last few weeks have been very beneficial for the Brazilian winter corn harvest. “On the one hand, the hot and dry weather is helping farmers speed up harvesting. The latest numbers indicate that the harvest rate is at 21%, well above the usual 5% for this time of year, and it is the fastest harvest rate in more than a decade”, says Ignacio Espínola, Market Intelligence analyst from Hedgepoint Global Markets.
“On the other hand, Anec expects an export of 1,02M mt of corn, which is lower than previous estimates of 1,24M mt”, he notes.
“The impressive pace of the Brazilian harvest in Paraná, where the harvest pace is at 29% and is expected to be the fastest harvest in history, has also brought some clarity on the status of the crop. There are 52% of the corn harvest declared as good, 31% as average and the remaining 17 as bad”, he highlights.
But it's not all good news. According to Ignacio, although we have an accelerated harvest rate, the dry climate that encourages crop maturation also reduces production potential. The expected second corn harvest, of 13,2M mt, will have to be reviewed by the end of the month, where we should expect a reduction.
“We have a different story on the soybean side. On the one hand, Anec increased exports in June to 14,88M mt (+1,1M mt) compared to last year's 13,78M mt in the same period. Furthermore, Abiove reduced its Brazilian soybean production forecast in 2024 to 152,5M mt (-1,4M mt). The USDA is at 153M mt”, he points out.
On the other hand, Chinese soybean imports from the US in June grew almost three times, reaching 1,27M mt against 0,49M mt in the previous year. On the other hand, Brazil, with 8,8M mt of soybeans exported, represents almost 90% of China's total imports, 10,22M mt.
“In addition, considering the period from January to May, shipments from Brazil totaled 24,71M mt to China, which represents an increase of 23% compared to the previous year. On the US side, the total amount is 10,85M mt, 34% below the previous year. Finally, China imported 0,2M tons of soybeans from Argentina in the same period”, he points out.
Still, the U.S. is experiencing the slowest soybean export program in 20 years, with farmers holding back beans in hopes of better prices.
“Finally, Chinese buyers are taking advantage of good prices and the large Brazilian supply, which gives the country a competitive advantage in relation to the USA”, he concludes.
In conclusion, in relation to corn, the good harvest rate and the good general conditions of the harvest are great news for Brazil. Recent crop updates mention dry weather, which should help the harvest continue to accelerate.
As for soybeans, sales of Brazilian soybeans will likely continue to grow due to good prices compared to North American origin. Additionally, China has been buying grains for June and July at a higher rate than in recent years, which negatively affects the US as it is trying to sell its old crop, but positively affects Brazil, where activity in major The ports of Paranaguá, Santos and Itaquí are at their peak levels for the season.
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