USDA Grain and Feed Update: Brazil (December 2024) (summary)

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Overview: This report provides a comprehensive update on the production, trade, and consumption trends of key grain and feed commodities in Brazil, focusing on corn, rice, and wheat. The report highlights recent market dynamics, including the effects of weather patterns, pest pressures, and domestic and international trade conditions. It also outlines government interventions and their implications for the sector.

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Corn

Production, Supply, and Distribution (PSD)

Key Developments:

• Improved Production Outlook: Following the end of El Niño, better weather conditions are expected for 2024/25, leading to a slight increase in the planted area and yields. Production is projected at 128 MMT.
• Pest Challenges: Corn leafhopper infestations in Rio Grande do Sul, Minas Gerais, and Goiás have caused significant yield losses in some areas.
• Regional Insights: Mato Grosso remains the largest corn producer, with second-season corn accounting for 79% of Brazil’s total output. Third-season corn, although small, plays a growing role in northern states like Bahia and Sergipe.

Market Trends:

• Domestic corn prices rose by 13.4% in October 2024 due to strong domestic demand and reduced liquidity.
• Brazil’s corn exports are projected to decline to 48 MMT in 2024/25, with China’s import volumes decreasing significantly.
• Corn ethanol production continues expanding, accounting for 23% of Brazil’s total output.

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Rice

Production, Supply, and Distribution (PSD)

Key Developments:

• Production Recovery: Improved profitability and better weather conditions drive a 3.2% increase in planted area for 2024/25, with production forecast at 7.4 MMT of milled rice.
• Government Support: Programs like ‘Arroz da Gente’ and stock purchases by CONAB aim to stabilize the rice sector following severe flooding in Rio Grande do Sul in 2024.
• Exports and Imports: Export volumes for 2024/25 are projected at 1.1 MMT, while imports are expected to decrease due to higher domestic production.

Market Trends:

• Domestic rice prices increased modestly by 0.4% in October 2024 but have declined due to harvest progress and government interventions.
• Primary export markets include Senegal, Costa Rica, and the Netherlands.

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Wheat

Production, Supply, and Distribution (PSD)

Key Developments:

• Production Trends: While production is forecast to rise slightly in 2024/25 to 8.2 MMT, the planted area is expected to decrease due to lower profitability.
• Quality Concerns: Adverse weather in Rio Grande do Sul and Paraná has resulted in lower grain quality, affecting domestic milling standards.
• Imports and Exports: Wheat imports are forecast to remain high at 6 MMT in 2024/25 to compensate for quality shortfalls in domestic production.

Market Trends:

• Domestic wheat prices declined in October 2024 but remain higher year-on-year. Production costs have also fallen, providing some relief to producers.
• Key export destinations include Vietnam, the Philippines, and Thailand.

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Conclusion and Outlook

Brazil’s grain and feed sectors navigate a complex landscape shaped by shifting weather patterns, pest pressures, and fluctuating global demand. While corn and rice production show signs of recovery, wheat faces challenges in both quantity and quality. Government interventions and evolving market dynamics will be pivotal in shaping outcomes in 2024/25.

Brazil remains a critical player in global grain markets, and its performance in the coming year will significantly influence international trade flows and pricing trends.

USDA report: Update on grains and feeds in Brazil (summary)

Date of publication: December 17, 2024Report number: BR2024-0038Prepared by: Marcela FormigaApproved by: Joseph Degreenia

USDA report: Update on grains and feeds in Brazil