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Brazil to have 'vast supply' of corn for export

Brazil will have a "vast supply" of corn for export, US officials said, upgrading harvest forecasts even as they cautioned that the South American country will require bumper imports of US wheat.

The US Department of Agriculture's Brasilia bureau pegged Brazil's corn crop at 72.5m tonnes, the second highest on record.

The forecast - above the official USDA figure upgraded to 71.0m tonnes two weeks ago - reflected "robust first-crop corn yields", with ideas for second, or "safrinha", corn fading thanks to delays in harvesting the soybean fields into which it is planted as a follow-on crop.

"Many Centre West farmers will opt out of second crop corn production due to the soybean planting delays, which push back soybean harvests dates and subsequently narrow or eliminate the planting window for second-crop corn," the USDA bureau said.

In the major growing state of Mato Grosso, "despite the intentions of many producers to plant second-crop corn, the delayed soybean planting is anticipated to reduce the state's production by 6%".

Safrinha corn, planted typically in January or February, is viewed as a risky crop, in having much of its growing period during the dry season.

'Not fit for milling'

The extra production means Brazil "will have a vast supply for export", the bureau said, pegged shipments in 2012-13 at 18.0m tonnes, second only to last season's record result, and 500,000 tonnes above the official USDA figure.

However, the increased surplus in corn contrasts with a raised estimate for the country's deficit in wheat, after a harvest which, at 4.3m tonnes, fell by one-quarter year on year, a bigger drop than Washington has factored in.

Besides lower sowings, the crop was hurt by "adverse weather events, ranging from late frosts and constant rains during the flowering and grain filling stages" in the major producing state of Rio Grande do Sul.

"In many cases, the state's wheat no longer has the necessary quality for domestic milling, which was also a consequence of the weather."

Imports from North America

With the crop in neighbouring Argentina, Brazil's usual source of wheat imports, also undermined by a wet harvest and a drop in sowings, buyers will increasingly look to Canada and the US for supplies.

The bureau forecast Brazil's overall imports from North America at 2.5m-3.0m tonnes, including a "conservative" 1.5m tonnes from the US.

Brazil has not since the 1980s imported US wheat in such quantity.

The country is also believed unusually, to have sought imports as far as Germany, a major European grower of hard wheat varieties used in making bread.

'Regular rains helped corn'

The comments come amid a growing focus on US wheat exports, and a quest for signs that shipments will pick up after a disappointing start to 2012-13, besides on South American crops, and growing expectations for Brazilian output, contrasting dwindling hopes for Argentina.

Consultancy Safras & Mercado earlier this week raised its estimate for Brazilian corn output to 70.7m tonnes, from the 69m tonnes, citing improving yields in the south, while rival Agroconsult last week pegged the harvest at 74.7m tonnes.

"Regular rains helped the corn crop in the critical development phase," Agroconsult said.

The official crop bureau, Conab, earlier this month nudged its forecast higher to 72.2m tonnes.

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