South America Grain to US: Impacts which Crop?
May 20, 2013
South American supplies will NOT be able to help overall shortages in both US corn and soybeans. I have had several subscribers ask me about Brazilian corn and soybean imports and how they will effect the US market. Here's what I have been hearing and I how I see it playing out:
* Brazilian soybean crop is late: Both on the planting side and harvesting side, therefore soybean exports will run beyond their normal time frame.
* Soybean quantity is much greater than last year: meaning they have more soybeans to export this year compared to last. This will also extend the overall length of their soy export program.
* Traditional soy export season extended 3-4 months: exports traditionally ending in early September, will more than likely extend thru late-Nov or early-Dec.
* US exporters concerned: with Brazilian exports extending well beyond their traditional time frame and Brazil's 2014 soybean crop set to come out of the ground just a few weeks later, US export window is shrinking.
* Logistical infrastructure in Brazil limits exports: because of limitations, both soybeans and corn can not be exported in large doses at the same time. Therefore the trade is curious in regards to just how much of either will be available to US importers.
* Second crop corn in Brazil will start to be harvested next month: but still with so many soybeans to export the trade is starting to think Brazil's corn exports could be pushed to the back burner.
* Corn exports in Brazil pushed back well into the early part of 2014: To what degree and magnitude remains the question. Traditionally corn export out of Brazil would pickup as soybean exports wind down. This year that won't happen until late in 2013, hence corn exports will be extended.
Summary: I see no real way for Brazilian corn AND soybean imports to have a major impact on US old-crop prices during the coming few months.
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