You are here
Brazil corn exports soar as weak currency, high prices boost deals
By Roberto Samora
SAO PAULO, May 28 (Reuters) - Brazilian corn farmers are eagerly taking advantage of favorable market momentum as prices in Chicago jump and a weak local currency boosts their gains in reais, according to market data, brokers and analysts.
Corn exports in May reached 908,400 tonnes as of Friday, according to official trade data, an unusual volume at this time in the season when soybean shipments prevail. Brazil normally increases corn shipments in the second semester, since most of the crop is harvested during Brazil's winter.
The volume of May corn shipments is already double that of April and is sharply above the numbers seen at this time last year.
"The exchange rate favors the competitiveness of Brazilian corn. Chicago prices are helping, but the currency is the main driver," said Ana Luiza Lodi, a grain analyst for broker and consultancy INTL FCStone.
She added that the fact that Brazil is poised to produce a record corn crop this year, nearing 100 million tonnes, also boosts export prospects.
Chicago corn prices neared a two-year high on Tuesday as forecasts of heavy rain across key U.S. growing regions threatened further delays to plantings.
Brazil's currency, the real, has been hammered recently partly due to political instability, with investors fearing the government may not be able to pass a comprehensive pension reform.
The real was quoted at 4.03 to the dollar on Tuesday, stronger than early in the month, but around the weakest level since last year.
A broker in Paraná state, the second-largest Brazilian corn producer, said that farmers are eager to close forward sales for 2020. "It is the first time I see corn export deals for such a distant delivery", he said.
Port lineup data from shipping services firm Cargonave shows 44 ships booked to load corn in Brazil from this week through June 15, with a total volume to be loaded of 2.59 million tonnes.
Grain exporting group ANEC, which represents traders such as ADM, Cargill, Brazil's Amaggi and China's COFCO, projects corn exports at 30 million tonnes this year, but said it is possible that shipments could surpass that mark.
(Reporting by Roberto Samora; Additional reporting by Gabriel Araújo and Marcelo Teixeira; EDiting by Steve Orlofsky)
© Copyright Thomson Reuters 2019. Click For Restrictions - http://about.reuters.com/fulllegal.asp