Brazil Corn Crop Results and U.S. Corn Demand

Brazil Corn Crop Results and U.S. Corn Demand

This month USDA predicted Brazilian farmers would raise a record sized corn crop. Even if they do, because the United States is far and away the biggest player on the world stage, one agricultural economist sees demand holding the price of corn steady.

Last fall U.S. farmers harvested a 15.1 billion bushel corn crop. By comparison, Brazilian producers will take in 3.6 billion bushels this year. At least that's what USDA is predicting at the moment. Much of that crop has just been planted and there is a great deal weather between now and harvest time, three months from now, says Todd Hubbs, University of Illinois Agricultural Economist.

Hubbs: "Just like any weather-related crop, the possibility is there for a bad crop year. I feel like that number could turn out even if it does, we are still the major corn producer in the world. A lot of what is going on domestically does provide some support for corn prices moving forward. We've seen a really strong corn use for ethanol and they raised that number another 10 millon bushels. On the flip side they once again lowered feed and residual use for old crop corn."                     

 

The result of the changes to the U.S. corn balance sheet was a wash. We'll know more about how much underpinning strength there might be in the corn market March 31. USDA releases two reports that day. One will estimate how much corn has been used to feed livestock in the nation, and the other surveys how many acres of corn, and other crops, U.S. farmers expect to plant this year.

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