Millions of tonnes of Brazilian corn could be left outside,
if farmers do not clear out soybeans before the safrinha harvest starts in
June, analyst Dr Michael Cordonnier warns.
"Brazil always has a chronic shortage of storage space for
its increasing grain production, but this year it could be even worse," Mr
"Brazilian farmers produced a record large soybean crop and
they may also produce a record large safrinha corn crop as well, so just the
large production estimates alone have people worried about having enough
Slow soybean sales
The size of the expected corn harvest alone would make
storage tight, Dr Cordonnier said.
But the situation could be exacerbated by very slow farmer
sales of the soybean harvest.
Estimates from the Brazilian consultancy AgRural showed that
as of the end of March, farmers had sold just 49% of their soybean crops.
This is the slowest pace of selling in seven years, as
farmers hold onto beans in hopes that prices rise.
A stronger Brazilian real, combined with ample supply and
sluggish international grain markets, have weighed heavily on corn and soybean
prices in Brazil.
"The prices for both soybeans and corn are below the cost of
production, so there is very little incentive for farmers to sell their grain
any time soon," Dr Cordonnier said.
"Many farmers are only selling what is needed to pay their
immediate bills," he noted.
"The slow selling is keeping the grain silos full of
soybeans," said Dr Cordonnier.
"In Mato Grosso for example, the soybean harvest is all
complete and the safrinha corn harvest will start in June," he said.
"If the soybeans are not moved out by then, the grain
elevators will be forced to store the corn outside in huge piles."