Brazil, the biggest corn exporter after the U.S. in the past season, is pushing to win a share of China’s imports of the grain for the first time as the outlook for surging U.S. output threatens to curb the South American nation’s shipments.
The country has a 10 million-metric-ton corn surplus it hopes to ship to China, Brazilian Agriculture Minister Antonio Andrade said at a media conference in Beijing today. Failure to direct the surplus to China may cause Brazilian exports to drop to 18 million tons in 2014 from 21 million this year, Silvio Porto, director of Brazil’s Conab crop-forecasting agency said in Brasilia today.
Brazil is seeking to secure Chinese purchases at a time the U.S. is poised to produce a record amount of the grain used to feed livestock as American crops recover from the most-severe drought since the 1930s last year. While China is the second- largest grower, its purchases may jump to a record 7 million tons in the year through Sept. 30 as hog herds and poultry inventory expand, according to U.S. Department of Agriculture estimates.
Corn has slumped 40 percent this year as supplies surge. Futures for delivery in December were unchanged from yesterday at $4.2050 a bushel as of 7:45 a.m. on the Chicago Board of Trade.
The U.S. harvest may reach a record 14.029 billion bushels, or 1.3 percent more than the U.S. Department of Agriculture’s prediction in September and 30 percent larger than in 2012, according to a Bloomberg survey of 36 analysts.
Brazil and China signed a quarantine agreement on Nov. 6, paving the way for the South American nation to begin exports for the first time. The corn pact follows similar approvals for Argentina and Ukraine last year, allowing China to lessen its reliance on the U.S.
"Opening the door to Brazilian corn gives some competition to U.S. exports," said Li Qiang, chairman of Shanghai JC Intelligence Co. in Shanghai.
Argentina and Ukraine are set to match Brazilian exports of 18 million tons in the current 2013/14 season, according to USDA estimates.
Brazilian corn growers are forecast to reap between 78.5 million and 79.8 million tons of the grain in the current season, up from 81 million in the previous harvest, the government said today.