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Brazil's safrinha harvest could leave 'huge piles' of corn without storage

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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 Cordonnier said.

"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 storage space."

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.

Low prices

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.

'Huge piles'

"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."

By William Clarke

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