Corn is in the open in Brazil due to lack of space in warehouses

Product accumulates outside the silos, which are filled with soy; as harvest progresses in Mato Grosso, farmers worry

O corn accumulates outside Brazilian silos at the fastest rate in years, as the country’s largest producing region reaps a super crop.

The warehouses are still full of Soy, which is harvested just a few months before maize. In Mato Grosso, soybean production was also high this season and sales are slower than normal, leaving warehouses with no space to receive corn, according to Cleiton Gauer, superintendent of the Mato Grosso Institute of Agricultural Economics (IMEA).

While it is not uncommon for crops to be stored outdoors when indoor capacity is exhausted, this has not been seen on such a scale for at least the past two years. As the huge corn harvest Mato Grosso advances, farmers and operators face a lack of space.

O Accumulation threatens to put further pressure on prices corn and soybeans, which are already falling on Chicago futures markets amid promising weather in US croplands. Corn fell on Thursday to the lowest level since before Russia invaded Ukraine. Soybeans fell to the lowest level since January.

On the other hand, the drop in futures markets offers hope that food inflation can moderate in the coming months, even with historically high prices.

At the end of May, about 11 million tons of soybeans in the state were still in the hands of farmers, against 5.5 million a year earlier, according to Daniele Siqueira, an analyst at AgRural. This month, soybean sales picked up on a weaker real, improving demand and pressure to move the oilseed out of warehouses, she said.

Another reason for lack of space is the speed of harvest in Mato Grosso. As of June 17, it was 27% complete, up from 4% a year earlier and a five-year average of 14%, according to Imea. The state should harvest 39 million tons of corn, an increase of 20% compared to the previous crop. This corresponds to about a third of Brazilian production, which could also reach a record 115.2 million in this harvest, according to Conab.

Source: Bloomberg