Surging demand from the European Union since July could push Brazil’s corn exports to a record 10 million metric tons this year, traders in that country told Reuters News Service last Friday.
That figure is more than twice last year's sales of 4 million tons and is also higher than the 7.5-8 million metric tons in sales that traders in general had expected in recent months.
A surge in sales for the European market, as hot and dry weather affected that region's grain crop, has made even Brazil's conservative crop supply agency Conab revise upward its projection for Brazilian corn exports.
The corn analyst at the government’s crop supply agency Conab, Marco Antonio Carvalho, said he was revising upward his forecast for Brazil's 2007 corn exports in 2007, but declined to say by how much. Conab's crop figures are to be released on Sept. 4.
"I intend to alter the figure for exports, and I'm not sure this revision will be the last one because market is extremely heated," Carvalho said.
"The rise (in exports) is a consequence of the new destinations in Europe. The key aspect is the condition of their wheat," said a broker based in Sao Paulo, who was also reconsidering his forecast.
"The wheat, which normally would be used to produce feed, is in bad condition, so high-quality grain will probably be used for feed," he said.
European buyers also tend to prefer Brazilian corn because it's not genetically modified.
In July, Brazil’s corn exports reached a record level of more than 1 million tons.
"There's more than 1 million tons designated to be shipped by September. If this rhythm keeps up, I'd say exports will total 9 to 9.5 million tons. It could even reach 10 million tons," a broker said.
Almost 2 million of the 5.6 million tons of corn Brazil had exported since the beginning of the year was directed to the European market and this amount should grow in coming months as countries such as Germany and France emerge as buyers.
Local prices are going up due to high international prices and to the premium paid for the conventional corn. At Paranagua port, prices are at a record, roughly $200/metric ton ($5.07/bu.).
Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.