Brazil's corn stocks build
Due to delayed plantings in February, the harvest of Brazil's second corn crop (safrinha) is slow to finish, according to Brazil's National Supply Company (Conab).
The rains of February have impeded early works. Currently, the country has reached over 95% of the safrinha harvest.
The last Conab report estimated 46.1 million tons for the second corn crop, which is a new record. In the previous season, Brazil had harvested 39.1 million tons of its winter crop.
Even though international prices are not high enough, Brazilian farmers exported 3.05 million tons, just in August. Part of the explanation can be put on a higher dollar value in the period against the Brazilian Real (U.S. $1 = R $2.30 averaged). But the last week of August had insignificant corn exports.
Paulo Molinari, a grain market analyst at Safras & Mercado, a consultancy group based in Porto Alegre, Rio Grande do Sul, says that Brazilian farmers are capitalized and perhaps may not rush to sell corn.
"Now the U.S. harvest is coming, and Brazil is not competitive with low prices. As Brazilian growers are capitalized, they may lose the best sales moments. There is still a huge corn stock to sell. Just in Mato Grosso (state), there is still 50% of the safrinha stock," explains Molinari.
Figures from Safras & Mercado reveal that Brazil still has 13.8 million tons of corn stocks from the 2012-13 season. As of September, the total domestic consumption in the country is estimated at 52.3 million tons (45 million for animals, approximately), and 18.7 million tons exported.