The U.S. ag attache in Brazil has raised its estimate of the country's 2011-12 corn crop by 9 million metric tons (MMT) to 64 MMT -- a 14% increase over 2010-11. The attache says high corn prices are causing producers throughout the country to increase acreage, resulting in a shift from edible beans and wheat. USDA currently estimates the crop at 61.0 MMT.
The attache forecasts that producers have forward contracted 30% to 40% of anticipated production, "It appears that producers are using their increased profits and forward contracts to invest largely in better seed varieties (stacked-trait biotechnology varieties, in particular), fertilizer, agrochemicals, area and in logistics," says the attache.
Additionally, the attache expect an even greater increase in the winter corn crop (safrinha) planted area.
Due to the expected increase in production, the attache raised its 2011-12 export forecast by 1 MMT to 11 MMT -- a 20% increase from 2010-11. "2011-12 exports should increase to meet increasing global demand and is made possible by the forecast record corn production," says the attache.
Juli says: Dr. Cordonnier currently projects the crop at 63.0 MMT, with a maximum at 64 MMT -- very close to the attache estimate. But with both of these estimates above USDA's current peg of 61.0 MMT, it raises the odds the World Board will raise its projection in next week's Supply & Demand Report.