today..........
http://www.agrimoney.com/news/corn-soybean-rally-isnt-over-yet-says-macquarie--4956.html
http://www.agrimoney.com/news/un-ditches-hopes-of-rise-in-world-grain-supplies--4953.html
http://www.agrimoney.com/news/uk-wheat-deteriorates-further-despite-drier-spell--4955.html
Alessandro Teixeira, second-in-command at Brazil's Development, Trade and Industry Ministry, has announced the government is monitoring grain exports amid fears that stocks will be insufficient to supply the domestic market.
The initiative came from Agriculture Minister Mendes Ribeiro, who asked that special attention be given to corn, said the official
The move did not automatically mean export restrictions were on the way, said Teixeira, but the clear implication is that they would be applied if local supplies or prices rose substantially.
The potential for soybean shortages has been signposted for some time with crushers already organizing imports from neighboring Argentina, Uruguay, and even the U.S., to meet late season needs. But it is the possibility of sharp price hikes and localized shortages of corn that has got everybody concerned.
Unlike this season's soybean crop, which declined sharply due to the summer drought, Brazil will produce a record corn crop of 73 million metric tons (mmt).
However, winter-crop corn is not currently getting from the top-producing regions of Mato Grosso to the southern poultry and pork producers because priority is being given to exports.
Brazil shipped a record 2.76 mmt of corn in August, the first time monthly shipments has topped 2 mmt, making the possibility that 2012 exports will reach 15 mmt a real possibility -- that would be 30% higher than the previous yearly record.
The government is studying the possibility of bringing in the army to ship corn down from the center-west to the south and northeast to improve supply in these regions.
But the immediate supply problem is a bit of a smoke screen. Behind lies a stickier issue to which the government's possible answer of limiting exports is troublesome.
Much like chicken and pig farmers across the world, Brazil's massive poultry and pork industries are struggling because of sky-high feed costs. Under normal circumstances, the fact that Brazil produced a record corn crop, and has near record stocks of 13 mmt, at a time when the U.S. is facing historic losses would have given the local industry a clear comparative advantage. But the rise of corn as an export commodity in Brazil has reduced that advantage as internal prices have become more closely linked to international quotes. In response, the poultry industry is lobbying hard for the government to ensure that local prices don't spiral out of control. One solution would be to control the amount of corn that can leave the country, which would be good for the meatpackers but not so good for grain farmers, who have benefitted from a much more liquid corn market, with better financing possibilities, this year after exporters began buying corn ahead planting. ADM et al would be less likely to close such deals in the future, if government shipment controls were imposed.
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
