Brazil boosts corn exports on Ukraine conflict

Brazil is closing corn export deals for April and May — a period when shipments traditionally dwindle near zero — to take advantage of opportunities that have arisen because of the interruption of corn exports from Ukraine caused by the conflict.

In the last few days, deals have already been closed totaling between six and 10 cargoes for shipment in April from the port of Paranagua, for a potential total of 650,000t, according to market participants. These are opportunities that have arisen to supply demand from North African countries, but it is estimated that there will also be exports to European countries, Agrinvest Commodities market analyst Eduardo Vanin said. These countries would normally take their grain from Ukraine, whose shipments have been cut off because of the Russian invasion.

The rise in premiums in the US has made prices in Brazil more attractive for buyers. The deals closed for shipment in April had a premium in the range of 160¢/bu over the May contract on the CBOT.

The exported corn was produced during the summer crop in Parana state and the deals involved agricultural cooperatives. The volumes were supplied to at least five trading companies. It is expected that corn cargoes will also be traded for shipment in May, which would raise to 15 cargoes the total exported in these two months, equivalent to about 975,000t.

Data from the National Association of Cereal Exporters (Anec) shows that in May 2021 Brazil did not export any volumes of corn and in April only 21,991t were shipped. The latest national supply company Conab forecast estimated Brazilian corn exports for this year at 35mn t, against 20.6 mn t shipped in 2021.

With these new opportunities, Agrinvest Commodities foresees much higher exports, which it says may reach 43mn t.

Despite the deals reported with Parana cooperatives, in the case of the Santos Tubarao cargo market, responsible for the largest volume of corn exports in the country, indications are still scarce, amid caution of sellers and buyers as commodity prices have been driven by the conflict between Russia and Ukraine.

A deal was confirmed this week at the port of Paranagua with a premium of 178¢/bu over the May contract on the CBOT for shipment in the second half of April.

By Alessandra Mello