Brazil’s corn price outlook continues to be strongly bullish, reflecting reduced production in last winter’s crop and sustained domestic demand, reports Alfredo Navarro, the U.S. Grains Council’s Brazil representative.
Domestic corn demand has not been affected by a decline in Brazil’s meat exports, as a real increase in incomes has led to increased meat consumption within Brazil. Add to that a drastic decline in corn imports from Paraguay, and Brazil is facing one of the lowest corn carryover rates in recent history.
“All this has kept prices much higher,” said Navarro.
“As a result we are seeing a significant increase in farmers’ capital for investing in the next summer crop.”
Corn prices in central and southern Brazil were even higher this June and July than in 2008, a situation that typically triggers increased corn acreage in the following season.
Navarro pointed to a significant change in Brazilian cropping patterns over the past decade as corn plantings increase in Brazil’s winter season and decrease in the summer, giving up area to soybeans.
Another change is the growing adoption of genetically modified corn from 1.5 percent of Brazil’s planted acres in the summer of 2008/2009 to 50.2 percent by the summer of 2010/2011.