Brazil represents a bigger threat to the US in corn rather than soybeans in export markets, for now, the head of Archer Daniels Midland said - while forecasting a boost in oilseeds from wheat dynamics too.
Juan Luciano, the ADM chief executive, flagged the threat to US crop trading "because we're going to get all these potential exports from South America" during the July-to-September quarter, following strong corn and soybean harvests in the likes of Argentina and Brazil.
Brazil's 2016-17 corn production, including the ongoing safrinha harvest, will end up 45% above last year's drought-affected levels, at 97.0m tonnes, with soybean output up 18.1% at a record 114.0m tonnes, on US Department of Agriculture estimates.
It is the country's bumper corn harvest which looks like providing particular competition to US trade, thanks in part to continued knock-on effects of Brazilian growers reluctance to sell soybeans in particular at prices dented by strengthening the real as well as by softer international values.
Brazilian soybean prices, at R$69.98 per 60 kilogramme bag, are down 15.5% over the past year, according to data from research institute Cepea, compared with a 2.0% decline in dollar-denominated Chicago futures.
"Talking about Brazil, if you think about soy, the farmers probably have sold about two-thirds of it, and it would compare to about over 80% a year ago," Mr Luciano told investors.
"New crop [2017-18], at the moment, probably maybe 8-10% versus maybe 15% a year ago."
For corn, however, sales of 2016-17 crop, at about half of production compare with "maybe 55% a year ago".
And this trend will be reflected in shipments.
"I would say we'll probably see Brazilian farmers, or Brazil, exporting more of the corn and holding a little bit more of the beans as they go forward," Mr Luciano said.
The trend also reflected a demand dynamic, in that Brazil does not "have a big domestic market for corn.
"So I think that if you're a farmer, you try to position in taking the export opportunities, while you can hold a little bit more on soybeans because, eventually, you still have… domestic crushing that you can place those volumes later on in the season.
"That's where we see the pattern, probably South America more aggressive in corn exports and maybe the US being able to compete in soybeans a little bit more during the second half [of 2017]."
The comments will come as a relief to soybean traders, after an unusually weak pace of forward sales so far of US supplies for 2017-18, which starts next month.
As of July 20, the US had received export orders for 6.03m tonnes of soybeans for delivery next season - a slump of 39% year on year.
And Mr Luciano flagged the prospect of "strong domestic [US] demand" for soybeans too in the second half of 2017, after a period "softer demand" in the first half of the year, reflecting factors including the overspill of distillers grains (DDGs) after China imposed hefty taxes on US exports of the corn-derived feed ingredient.
"We have taken this year the impact of the DDGs shift from China not importing that anymore. So we've absorbed that."
Furthermore, the market has "for the most part… cleared with all the inventory of low-quality feed wheat that was competing" with oilseed meals for a place in feed rations.
"Most of the feed wheat… the market has basically consumed over the second quarter."
Meanwhile, the wheat market will present a further opportunity for ADM, in the need to secure sufficient supplies of higher protein grain, after drought dents to North American harvest prospects.
"We see that our ag services business will benefit from our ability to segregate high quality wheat as we go into the second half," Mr Luciano said.
By Mike Verdin