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Brazil Anec Estimates Lower Brazilian Soybean and Corn Exports

The Brazilian National Association of Grain Exporters (Anec) recently reduced their estimate of Brazil's soybean and corn exports for 2019. They are now estimating that Brazil will export 67 million tons of soybeans in 2019, which is down from their last estimate in early January of 73 million tons.

In 2018, Brazil was the beneficiary of the trade dispute between the U.S. and China. As a result, Brazilian exporters "swept the bins clean" and exported a record 84 million tons of soybeans. Over 80% of those soybeans went to China. Anec did not indicate why they reduced their estimate of Brazil's soybean exports, but there were probably several factors including: a smaller Brazilian soybean crop in 2018/19 compared to a year earlier, more competition from U.S. exports, and a smaller carryover of soybeans going into 2019.

During the month of March, Brazil's soybean exports were 9.6 million tons, which was down 12% compared to a year earlier. The downward trend appears to be continuing in April with a lineup for the month of 6.9 million tons compared to April of 2018 when Brazil exported 10 million tons. Thus far this year, Brazil has exported 18.3 million tons of soybeans with 72% of the soybeans destined for China.

For corn, Anec is now estimating that Brazil will export 28 million tons of corn in 2019, which is down from their estimate in early January of 31 million tons. One of the things they are concerned about are the higher minimum freight rates in Brazil that could reduce Brazil's competitiveness in the world market.

This will be the first year that the higher freight rates will be fully in force during the entire corn harvest/export season. The vast majority of Brazil's corn exports come from the safrinha corn crop, which will account for more than 70% of Brazil's total corn production. The safrinha corn will be harvested between June and August with the main exports being between September and December.