Highlights

2015/2016 wheat production is estimated at 5.5 million metric tons (mmt) and is in good condition due to favorable weather in the south of Brazil. 2015/2016 corn production is estimated at 67 mmt, a 21 percent drop from the previous record year. The decrease is due to an early start to the dry season having a big impact on yields for the second “safrinha" crop. 2015/2016 milled rice production is forecast at 7.2 mmt, a 15 percent decrease from the previous year as producers in the south are switching to more profitable crops.

Wheat

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Brazil

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2730

2730

2450

2480

2100

2200

Beginning Stocks

1887

1887

870

870

1310

1110

Production

6000

6000

5540

5540

6000

6000

MY Imports

5374

5374

6200

6000

5800

6000

TY Imports

5869

5869

5925

5925

5800

6000

TY Imp. from U.S.

1296

1296

422

500

0

0

Total Supply

13261

13261

12610

12410

13110

13110

MY Exports

1691

1691

1100

1100

1500

1000

TY Exports

1688

1688

1063

1063

1500

1000

Feed and Residual

300

300

500

500

300

300

FSI Consumption

10400

10400

9700

9700

9800

9800

Total Consumption

10700

10700

10200

10200

10100

10100

Ending Stocks

870

870

1310

1110

1510

2010

Total Distribution

13261

13261

12610

12410

13110

13110

Wheat Supplies: 2015/2016 production is estimated at 5.5 million metric tons (mmt). 2016/2017 production is forecast at 6 mmt, in line with yearly trends. The wheat that will be harvested between October and December is reportedly in good condition due to favorable weather in the south of Brazil. Producers are showing a greater interest in commercializing their crop early; fearing the expectation of a large global crop could drive down prices the longer they wait.

Wheat Trade: 2015/2016 imports are forecast at 6 mmt, up slightly from the previous year. 2016/2017 imports are forecast to be similar to the previous year at 6 mmt. 2015/2016 exports are estimated at 1.1 mmt, a 35 percent decrease due to good climate conditions and expected higher quality than the previous year. 2016/2017 exports are forecast down slightly to 1 mmt based on the assumption of normal weather and good quality.

Wheat Consumption: 2015/2016 consumption is estimated down at 10.2 mmt, a 5 percent decrease from the previous year. Some milling quality wheat has been sold for use as feed while pork and poultry producers scramble to find feed on the domestic market due to tight domestic corn supplies. 2016/2017 consumption is forecast at 10.1 mmt.

Corn

2014/2015

2015/2016

2016/2017

Market Begin Year

Mar 2015

Mar 2016

Mar 2016

Brazil

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

15750

15750

16000

16000

16300

15800

Beginning Stocks

13972

13972

7842

7842

5342

2842

Production

85000

85000

67000

67000

82500

83000

MY Imports

331

331

2500

2000

600

600

TY Imports

534

534

1700

1500

1100

1100

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

99303

99303

77342

76842

88442

86442

MY Exports

34461

34461

16000

18000

24500

23000

TY Exports

21909

21909

33500

35000

20000

19500

Feed and Residual

48000

48000

47500

47500

49000

49000

FSI Consumption

9000

9000

8500

8500

9000

9000

Total Consumption

57000

57000

56000

56000

58000

58000

Ending Stocks

7842

7842

5342

2842

5942

5442

Total Distribution

99303

99303

77342

76842

88442

86442

(1000 HA) ,(1000 MT)

Corn Supplies: 2015/2016 production is estimated at 67 mmt, a 21 percent drop from the previous record year. The decrease is due to an early start to the dry season having a big impact on yields for the second “safrinha" crop. 2016/2017 production is forecast at 83 mmt due to increased profitability. Because of the tight supplies, high domestic prices are driving an increase in first crop corn, which is expected to be about 38 percent of the total crop. The area is expected to be taken from soybean as corn becomes the more profitable crop.

Corn Trade: 2015/2016 corn exports are estimated at 18 mmt, down nearly 50 percent from last year's record exports. Any additional corn that will be exported was commercialized prior to the second “safrinha" harvest and it's unlikely that there will be any new sales realized until next year. With the exchange rate stable around R$3.20 to US$1 since July, sellers don't have the same incentive to export as they did in January and February when the Brazilian currency was much weaker. 2016/2017 exports are expected to rebound to 23 mmt, assuming normal weather and no delay in the planting of the second crop.

2015/2016 imports are estimated at 2 mmt, an 83 percent increase from the previous year due to tight domestic supplies. So far this marketing year, Brazil has imported 1.04 mt, with about half from Argentina and and half from Paraguay. On Sept 28, the Brazilian Foreign Trade Board (CAMEX) extended for 90 days the zero percent exemption of Common External Tariff for corn imports outside of Mercosul up to one million metric tons. The previous exemption would expire on November 19. The move is meant to encourage imports of U.S. corn to provide relief to Brazilian pork and poultry produce being squeezed by high domestic corn prices. The regulatory body CTNBio approved three U.S. biotech events on October 6, paving the way to allow U.S. corn imports for feed use only. The United States could potentially export 1 -1.5 mmt to Brazil.

Corn Consumption: 2015/16 consumption is forecast at 56 mmt, a two percent decrease from the previous year due to high domestic prices and reductions in the pork and poultry sectors. Some contacts have heard of farmers using bread quality wheat as feed, but otherwise Brazil doesn't have many substitutes for corn that can be switched over quickly.

A recent media report stated that corn ethanol is expected to expand in the state of Mato Grosso, but with high domestic prices unlikely to decrease until the next second “safrinha" crop is harvested and falling gasoline prices, corn ethanol may not be profitable in the near term.

Rice, Milled

Apr 2015

Apr 2016

Apr 2017

Brazil

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2295

2295

2000

2000

2300

2300

Beginning Stocks

639

639

641

641

251

301

Milled Production

8465

8465

7210

7210

8500

8500

Rough Production

12449

12449

10603

10603

12500

12500

Milling Rate (.9999)

6800

6800

6800

6800

6800

6800

MY Imports

393

393

800

850

600

600

TY Imports

363

363

750

750

600

600

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

9497

9497

8651

8701

9351

9401

MY Exports

931

931

600

600

800

800

TY Exports

895

895

700

700

800

800

Consumption and Residual

7925

7925

7800

7800

7950

7950

Ending Stocks

641

641

251

301

601

651

Total Distribution

9497

9497

8651

8701

9351

9401

Rice Production

2015/2016 milled production is forecast at 7.2 mmt a 15 percent decrease from the previous year as producers in the south are switching to more profitable crops. Due to the high price of domestic corn, some farmers are planting first crop corn instead of rice. But domestic rice prices are also rising as Brazil faces a shortage of stocks. These higher prices are expected to spur 2016/2017 production to 8.5 mmt.

2015/2016 stocks are estimated at just 301,000 mt. This is only about ten days of national consumption in a country where people eat rice nearly every day. The price of rice and beans, a staple meal in Brazil, increased 12.9 percent in the last 12 months. Because of the low stocks, any unexpected interruptions in supply could see prices increase even further.

Rice Trade

2015/2016 imports are estimated at 850,000 mt, up 54 percent from last year, to meet offset reduced production and meet demand. 2015/2016 exports are estimated at 600,000 mt, down 35 percent from the previous year on higher prices and a need to meet consumption demands with domestic rice.

Rice Consumption: 2015/2016 consumption remains steady with a slight decrease to 7.8 mmt. Due to the higher prices for rice and beans, a small amount of consumers may reduce their portions of rice.