Cash Strategist
Author
Published
2/22/2021
Even though commodity futures remain elevated, we aren't seeing the rationing that would normally come with high values. This is for a variety of reasons, with a simple lack of alternative sources being a primary one.
Right now this is more of a case in the corn market. While the South American corn harvest is currently taking place, this corn is needed for domestic demand, especially in Brazil.
Brazil exhausted its corn supply last year and needs these new crop bushels to satisfy usage. The majority of Brazil’s corn exports come from the Safrinha crop, which is double cropped after soybeans are harvested. This will keep the United States as the leading corn supplier to the global market for at least the next 90 days.
There are also questions on how much corn Brazil will export this year. Brazil is seeing its domestic corn usage rise, mainly for ethanol and feeding.
As it does, the country will consume more production and scale back on exports or continue to deplete its reserves.
Rationing has...
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