World corn glut as Matto Grosso in Brazil doubles crop over last year
Corn fell in Chicago on concern a record harvest in Brazil’s Mato Grosso state may add to a supply glut and on speculation slowing US economic growth will cut demand for grain used to make ethanol.
Mato Grosso’s second-season corn crop is expected to be “super-sized,” climbing to 13.1 million metric tons from 6.9 million tons in 2010-11, Soybean & Corn Advisor wrote June 19. World stockpiles are expected to reach the highest level in more than a decade in 2012-13 on a record crop in the US, the country’s Department of Agriculture estimates.
“Brazil is expecting a record corn crop of its own this season,” Dave Norris, an independent grain trader from Harrogate, England, wrote in a market comment. “Theirs is on the market now, with local reports suggesting a really good second crop is on the cards.”
Weaker growth in the US has curbed demand for fuel. Crude oil reached an eight-month low on Thursday after the country’s stockpiles unexpectedly climbed to the highest in 22 years. About a third of the US corn harvest is used to produce ethanol that’s blended into gasoline.
US ethanol inventories had a 2.5% weekly gain in the week to June 15, according to the Energy Department.
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