Corn price traders may want to keep closer tabs on Brazil after it took the top spot from the United States as the dominant corn exporter.
The month of August saw Brazil become the top exporter of corn even amid harsh global weather conditions. In the past, infrastructure bottlenecks kept the largest South American economy from realizing its full corn exporting potential until now.
As a Reuters report noted, corn exports have been trending higher thanks to logistical breakthroughs — namely, the consolidation of northern export routes to make exporting more efficient. As a result, Brazil has become a force to be reckoned with when it comes to not just corn, but exporting grains in general — this certainly helps alleviate the pressures in other parts of the world such as Ukraine.
It also helps to ease pressure from disruptions in exports due to U.S.-China tensions. In the meantime, Brazil is taking full advantage of its vast farmland to harvest corn and combined with the improved exporting routes, the country became the top corn exporter.
“For more than half a century, US farmers dominated the international market for corn, shipping more of the critical crop than any other country to feed the world’s livestock, fill its stockpiles and manufacture its processed foods,” a Bloomberg article explained.
“No more. In the agricultural year ending Aug. 31, the US handed the corn-exporting crown to Brazil. And it might never get it back,” the article added.
Bloomberg noted that in the 2023 harvest year, the U.S. will account for 23% of global corn exports. Meanwhile Brazil is almost 10 percentage points higher at 32, according to data from the U.S. Department of Agriculture. Additionally, this lead may last well into the new year. The U.S. has only been the runner up in the corn exporting competition once in the past 60 years.
“Only once in data going back to the Kennedy administration did America drop out of first place before: for a single year in 2013 following a devastating drought,” Bloomberg noted.
Get Corn ETF Exposure
As traders keep an eye on Brazil for any indicators of price movements in corn, traders can get exposure to fluctuating corn prices via exchange traded funds (ETFs). Whether for trading short-term price action or as a long-term investment, consider the Teucrium Corn Fund (CORN).
The fund tracks three futures contracts for corn traded on the Chicago Board of Trade. It includes 35% second to expire contracts, 30% third to expire contracts, and 35% December following the third to expire. The various contract exposures help the fund limit the negative effects of rolling contracts, especially during a market in contango.
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