South American grain export competition rising
A University of Missouri ag economist says better than expected crop production out of South America is pushing the market lower, but there could be longer term implications.
Ben Brown said solid production despite adversity might be a signal of things to come.
“If this corn crop in South America faced everything it did this year and they’re still going to get a decent crop, not a record, but a decent crop, does that encourage Brazil producers to plant even more corn next year,” he said.
And he tells Brownfield South American corn acreage is trending upward.
“They continuously grow their second crop corn behind their full season soybeans, or their full season soybeans, and I think that’s going to continue to provide export competition for U.S. producers,” Brown said.
Brown said while export competition is growing, export demand with key trading partners like China is too.
“Overall, the market is maybe just holding pat,” he said.
Brown made his comments on Brownfield’s recent Weekly Commodity Market Update.