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South America positioned to dominate crop export market

An ag economist is fearful a tight U.S. grain outlook heading into harvest could open the door for South America to dominate the global grain market.

The University of Missouri’s Ben Brown said he’s expecting South America’s planted acreage total to rise moving forward, being incentivized by global market tightness. Meanwhile, he tells Brownfield U.S. producers are running out of room…

“I don’t know where we’re going to come up with additional acres,” he said. “We had high prices, and we have government programs that are coming out to encourage planting and production this year and we still decreased acres.”

Brown said back-to-back years of drought in South American have tempered the competitor’s production to the benefit of U.S. growers. But he says long-term price outlooks could swing widely.

“We could be sitting on a return to, let’s just say $4.50 [to] $5 corn with a good South American crop,” he said. “Or a bad South American crop takes us up closer to $10.”

Brown said he’s expecting crop markets to be mostly supported at least until South America’s next harvest in February and March before supply totals become more unpredictable.

Brown made his comments on Brownfield’s recent Weekly Commodity Market Update.